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September 4, 2013 Wednesday

Obamacare vs. Romneycare: The Labor Impact

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 748 words

HIGHLIGHT: Disruption to the labor market is likely to be far greater from the Affordable Care Act than what Massachusetts faced after it adopted its own health care law, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

From a tax perspective, the Affordable Care Act is in a different league than the Massachusetts health reform law passed in 2006.

The Affordable Care Act was intended to expand the fraction of the United States population covered by health insurance. The law includes taxes on employers and various implicit taxes on employees that go into effect over the next two years. Economic theory suggests that such taxes will contract the labor market in an amount commensurate with the amount of the new taxes. 

The federal government and other advocates of Obamacare have dismissed concerns that the coming labor market contraction would be significant, or even noticeable, by pointing to Massachusetts's experience with its so-called Romneycare system, also designed to expand insurance coverage. Because the Massachusetts labor market did not noticeably contract relative to the rest of the nation after its system went into effect, an official of the federal Department of Health and Human Services told The Washington Examiner that the experience in Massachusetts suggested "that the health care law will improve the affordability and accessibility of health care without significantly affecting the labor market."

Prof. David Cutler of Harvard recently addressed, on this blog, concerns about possibly adverse tax effects, saying, "Additional data from Massachusetts, where a state law was the precursor to the Affordable Care Act, suggests that the fears are overblown" and "at this point the evidence overwhelmingly suggests no need for major worry."

This position assumes that the Massachusetts system increased marginal labor income tax rates in the state by roughly the same magnitude that the Affordable Care Act will increase them in the United States (by marginal labor income tax rate, I mean the extra taxes paid, and subsidies forgone, as the result of working, expressed as a ratio to the total compensation from working). This assumption is no longer necessary, because the methods I have used to measure marginal tax rates from the American Recovery and Reinvestment Act of 2009, unemployment insurance expansions and the Affordable Care Act can also be applied to the Massachusetts health reform law. The results are shown in the chart below.

The left bar shows that the Massachusetts law did, on average, increase marginal tax rates and thereby reduce the reward to working. But the impact was well under one percentage point, and for that reason it's probably not surprising that, relative to other states that were not experiencing health reform, the Massachusetts labor market did not change noticeably after the law went into effect.

The right bar shows the impact of the Affordable Care Act on nationwide marginal tax rates: it increases national rates about 12 times as much as the Massachusetts law increased rates. Earlier this year I explained why the Massachusetts law was so different from a tax perspective: among other things, its employer penalty is an order of magnitude less, the state's population is not the same as the national population, and Massachusetts had already been helping unemployed people with health insurance.

It follows that the effect of the Affordable Care Act on employment and work hours would be roughly 12 times as great as the effect of the Massachusetts law. That doesn't by itself tell us the exact impact of the national law because we don't have a precise estimate of the impact in Massachusetts, except that it was small. For example, if the Massachusetts law reduced employment by 0.1 percent, the Affordable Care Act's effect would be roughly 1.2 percent; not small. If the Massachusetts law's effect were 0.25 percent (still small), the Affordable Care Act's effect would be 3 percent: again, not small. The bottom line was that it was wrong to expect the two laws to have had the same effects.

Call me gloomy, but I'm one economist who thinks that adding, on average, five percentage points to marginal tax rates will noticeably depress the labor market, while adding a few tenths of a point in Massachusetts did not.

LOAD-DATE: September 4, 2013

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October 14, 2013 Monday

The Hurdles to Success for the Affordable Care Act

BYLINE: PHILLIP SWAGEL

SECTION: BUSINESS; economy

LENGTH: 1756 words

HIGHLIGHT: The goals of the health-care law are laudable, but it is hobbled by unrealistic claims about its financing and heedlessness about its potential economic effects, an economist writes.

Phillip Swagel is a professor at the School of Public Policy at the University of Maryland and was assistant secretary for economic policy at the Treasury Department from 2006 to 2009.

The Affordable Care Act, or Obamacare, has had a difficult launching, but the more serious challenges for the law relate not to glitch-filled Web sites but rather to its possible long-term effects on the United States economy. The law is not likely to last if it imposes a severe drag on growth and job creation, or involves large costs obscured by the legislative gimmicks used to shape the scoring of the bill by the Congressional Budget Office.  Indeed, Casey B. Mulligan has discussed the negative effects of the legislation on the American labor market in a series of posts on Economix, while the policy expert Charles Blahous explains in detail why the "fiscally reckless" legislation will aggravate the already difficult federal and state fiscal situations.

Along with philosophical reservations about expanding the role of the government in American society, these concerns about the negative economic and fiscal impact of the Affordable Care Act drive much of the opposition to it. Governors who declined to take up the expansion of Medicaid, for example, worried about the fiscal costs left to them even with the federal government picking up most of the tab. 

At the same time, the goals of the legislation are laudable: to expand health insurance coverage, improve the quality of care and slow the growth of health costs. My view is that the presence of so many Americans without insurance or receiving inadequate health care is a moral affront to our affluent and generous nation. While at the Treasury Department, I worked on President George W. Bush's 2007 proposal to expand coverage through a change to the tax treatment of health insurance more progressive than the provision that ended up in the Affordable Care Act. And I was subsequently a co-author, with the tax expert Robert Carroll, of a market-based proposal that goes even further with tax code changes to both expand insurance coverage and improve incentives within the health care sector.

Still, the Affordable Care Act is the law of the land. Imagine then that the law worked - not just that the software glitches were resolved, but also that the legislation achieved its promise of expanding coverage while slowing cost growth and increasing the efficiency of the health care sector. This takes a huge amount of imagination, but under the best of circumstances here is how it might work.

As explained by the director of the Congressional Budget Office, Douglas Elmendorf, the Affordable Care Act improves insurance coverage by expanding Medicaid and by setting up exchanges on which people without access to affordable insurance can buy policies while receiving income-based subsidies to help cover the costs (and without having to worry about pre-existing conditions that might previously have made it difficult to afford insurance). A report by the White House Council of Economic Advisers says the expansion of coverage would increase societal well-being by an amount worth $100 billion per year, while the availability of policies through the exchanges would allow workers to switch jobs without losing coverage.

The White House report further notes that the exchanges would "'level the playing field' between large and small businesses" - insurance is often more expensive for smaller companies, which in turn are less likely to offer it to their workers, who then miss out on the favorable tax treatment for employer-provided coverage. The Affordable Care Act does not equalize the treatment of coverage between employers and individuals as in the approach proposed by Senator John McCain and favored by President Obama's economic advisers, but there is a rough trade-off in that employer-provided coverage retains the existing tax break while policies in the exchanges are subsidized for people with low incomes.

To prevent insurers that offer policies in the exchanges from having to cover only people with high health care costs, the Affordable Care Act includes a penalty for people who go without insurance. And to deter the unraveling of the current system of employer-provided coverage, businesses with 50 employees or more that do not offer health insurance will be required to pay a penalty (though this has been delayed a year, an inequity that administration officials find difficult to explain, including to the comedian Jon Stewart). It remains to be seen whether these penalties are large enough to motivate young, healthy people to take up insurance, while companies might see paying the penalty as less costly than offering coverage.

For workers with low wages, the subsidies in the exchanges are generally more valuable than the tax deduction for employer-provided coverage, so they might actually come out ahead from the abandonment of President Obama's promise that they could keep their existing coverage and see their usual doctors (the balance ultimately depends on how workers' wages change when employers shunt them over to the exchanges).

Providing insurance to millions more people will increase the use of health care services. This is a policy objective of the Affordable Care Act, but it means more spending, so the law includes measures meant to slow the growth of health costs. Some Medicare providers will be paid for the treatment of an illness as a whole (an "episode of care") rather than for individual procedures, a change meant to give providers incentives to avoid unnecessary treatments. A tax will be imposed on very costly health insurance plans to give an incentive to avoid policies with generous coverage, and payments reduced to certain Medicare plans and to providers such as hospitals.  An Independent Payment Advisory Board is to propose changes to Medicare to improve quality and reduce cost growth, with the recommendations to take effect unless Congress votes otherwise, rather than the current system in which a commission makes recommendations that can be ignored.

Health care cost growth has slowed in recent years, though as The Times reported in February, it is not yet clear "what is driving the lower spending trajectory." Still, proponents of the Affordable Care Act hope that its cost-reducing provisions will be more effective than expected by the Congressional Budget Office, and thus the fiscal outcome will be to save money rather than the roughly budget-neutral score estimated by the budget office if the provisions of the law are put in place.

Sticking to the law as enacted will be challenging, since government actuaries have stated that some of the payment cuts in the law are so severe as to jeopardize access to care by Medicare recipients. Similarly, the Affordable Care Act increased payments for treating Medicaid recipients, but only for 2013 and 2014; allowing these to go back down could make it difficult for those in the newly enlarged Medicaid program to find a doctor willing to treat them. If the higher payments are meant to be extended, however, then this means that the full costs of the Affordable Care Act are not accounted for in the law. It is noteworthy that reductions in Medicare overpayments were a putative funding source for the legislation, but underpayments such as those for doctors were not addressed. In other words, the cost of the law is again understated.

The Affordable Care Act imposes a variety of new taxes to cover part of the cost of providing coverage to millions of additional people, including taxes on high-cost health insurance plans, medical devices, tanning salons, and capital gains and dividends. This last provision is a penalty on people who save and invest; the administration uses the Orwellian phrase that it is a contribution. And these taxes are already under siege: it is possible that the medical device tax will be reversed as part of the current fiscal negotiations, while unions are pushing to modify the tax on high-cost health plans even before it takes effect.

Some of the financing behind the Affordable Care Act already disappeared when the administration acknowledged that it was not possible to develop a financially viable long-term insurance plan. Finally, the administration has repeatedly boasted that the law extends the life of the Medicare trust fund, even though the Medicare payment reductions that supposedly accomplish this cannot be spent both to finance the Affordable Care Act and to shore up Medicare. This implies that part of the financing behind the Affordable Care Act has in effect already been devoted to something else. If costs are higher than expected and some of the tax revenues do not materialize, the law as a whole could well turn into a largely unfunded new entitlement. So much for the new era of fiscal responsibility promised by Mr. Obama.

With the main provisions of the Affordable Care Act kicking in only in 2014 and the health insurance and health care industries adjusting to it for some time, it will take years for a proper evaluation of the law's overall impact on the economy. The question is whether the objective of helping many people to obtain insurance coverage can be accomplished at a cost that is acceptable to society, both in terms of the cost to taxpayers who ultimately will pay and the possible effects of slower economic growth from those taxes and other distortions introduced in the law.

Just as opponents of the law are apt to overstate its negative impacts with claims of "death panels," so too are proponents overly optimistic in underplaying its fiscal and economic consequences. The administration's misleading response to the scope of problems with the exchange Web sites is especially worrisome. The goals of the Affordable Care Act are laudable. But achieving them will require an honest assessment of both successes and problems, and a willingness to make adjustments going forward. This sort of critical introspection is not exactly a defining feature of the president or his administration. Millions of Americans could be helped by the Affordable Care Act once its start-up problems are resolved. Not much further down the road, however, President Obama's signature accomplishment could turn into yet another fiscal mess left to his successor.

LOAD-DATE: October 14, 2013

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August 7, 2013 Wednesday

The Economics of the Affordable Care Act

BYLINE: DAVID M. CUTLER

SECTION: BUSINESS; economy

LENGTH: 1524 words

HIGHLIGHT: Casey Mulligan’s negativity about the Affordable Care Act fails to acknowledge how it is likely to reduce health care expenditures, an economist writes.

David Cutler is Otto Eckstein Professor of Applied Economics at Harvard University. He served as senior health care adviser to the Obama presidential campaign in 2008.

Will the Affordable Care Act help or hurt the economy? At a time when economic growth remains mild and the employment outlook is mixed, answering this question is of fundamental importance.

The negative case is easy to understand. The law has a number of provisions that may inhibit employment and growth, including an employer mandate to pay for health insurance coverage (now delayed), increases in the Medicare contribution rate for high-income workers and taxes on medical device companies, health insurance companies and tanning salons. Many economists worry about the economic impact of these provisions (though fewer about the tax on tanning salons).

Casey Mulligan has just presented the gloomy situation on this blog, and he did so well. Professor Mulligan is a serious and concerned analyst; his views are not the rant of those who see death panels lurking around every corner. Indeed, many issues that Professor Mulligan highlights are topics that have drawn public concern; for example, Darden Restaurants (owner of Red Lobster and other chains) drew immense attention - much of it negative - when it announced that it would increase use of part-time labor to avoid the payment requirements for full-time workers under the Affordable Care Act.  

Interestingly, the most widely expected adverse effects of the Affordable Care Act have yet to materialize, despite the fact that it has been in place for nearly three years. As a recent chart released by the President's Council of Economic Advisers shows, hours of work are up in the restaurant industry since March 2010. The same is true in the vast bulk of retail businesses where the option to move workers from full to part time is a real one. It may be that companies are waiting until the employer mandate kicks in - or it could be that the fears of significant adverse effects were overblown.

Additional data from Massachusetts, where a state law was the precursor to the Affordable Care Act, suggests that it is the fears that are overblown. Two studies, one by Jonathan Kolstad and Amanda Kowalski and a second by Lisa Dubay, Sharon Long and Emily Lawton, found very little adverse effect from the employer and individual mandates on employment; workers valued the insurance greatly, so the mandate was actually a benefit for them.

It is possible that the differences between the Massachusetts and federal laws will lead to a different result for the Affordable Care Act, but at this point the evidence overwhelmingly suggests no need for major worry.

The Benefits of Cost Reduction

In looking at the totality of the Affordable Care Act, what is most noticeable for the economy is the good news that it promises for American workers and businesses. The most important component of the act is what it will do to the costs of medical care. For the last 25 years (see Table 5, Page 24, of from the National Federation of Independent Business), small businesses have ranked the cost of health insurance as the most critical problem they face. It is no wonder why: rising health insurance costs are associated with increases in total compensation, reduced competitiveness vis-à-vis other companies and increased human-resource problems.

The link between health costs and employment is increasingly clear. A study by Neeraj Sood, Arkadipta Ghosh and José Escarce shows that industries that provided health care to more of their workers in 1986 had significantly lower employment growth between 1987 and 2005. No similar relationship was observed in Canada, where businesses do not pay for health insurance, confirming the role of health care in the relationship. Another study from Katherine Baicker and Amitabh Chandra looks at area-level cost increases in the United States and reaches a similar conclusion.

A fundamental question about the Affordable Care Act is thus what it will do to employer spending on health insurance. The act has a number of provisions designed to reduce spending growth. These include the "Cadillac tax" on expensive health insurance plans and a transition of medical care payments away from fee-for-service payment into value-based payments. Economists are virtually united in asserting that a combination of these demand and supply-side levers are the way to get a handle on a wasteful system.

Already, these payment transitions seem to be having an effect. Health care cost increases are at the lowest level in the last half-century, and employer premium growth has slowed markedly. My own work with Nikhil Sahni shows that the Affordable Care Act is one factor in this slowdown.

In the testimony that Professor Mulligan mentioned and the analytic work behind it (done jointly with Professor Sood), I estimated that slowing cost growth along the lines made possible by the Affordable Care Act would lead to 250,000 to 400,000 jobs gained annually over the next decade. The effects would increase over time.

In the public sector, the impact of a cost slowdown is more difficult to assess. The federal government typically responds to increased Medicare and Medicaid costs by borrowing more. Lower national savings means less investment in plant, equipment and other productive activities. Using standard economic models, the President's Council of Economic Advisers estimated that slowing medical care cost increases by 1.5 percentage points annually (and effectively borrowing less) would lead to gains in the gross domestic product of 2 percent by 2020 and 8 percent by 2030.

Down the road, higher costs mean either higher taxes or reduced services. Neither the sequester nor the Medicare tax increase in the Affordable Care Act would have been necessary if Washington had dealt with health spending some time back. Similarly, state and local governments have cut education spending, laid off teachers and hired fewer police and fire fighters in response to higher benefit costs. A slowdown in cost growth could bring some of these jobs back.

Professor Mulligan discounts the possibility of implicit tax cuts in the future and does not consider the benefits of any additional spending that may result from lower public-sector health costs; implicitly, his analysis assumes that government spending is all wasteful. I disagree. Making room for productive investment in our economy is one of the major potential benefits of the Affordable Care Act.

Impact on the Work Force

At the work force level, the Affordable Care Act reduces or eliminates many distortions, even as it creates some others. The economist Brigitte Madrian showed nearly two decades ago that many workers were "locked" into their jobs because they had health insurance on a current job and might not be able to maintain that coverage if they switched jobs. Universal insurance coverage would free workers to move to their most productive job or to start a business. Other studies have shown that greater access to health insurance encourages people on disability insurance to work more, reducing the cost for that program.

Then there are the costs of workers missing work (absenteeism) or being less productive at work because they are ill. Common conditions like mental illness, back pain and persistent headaches lead to each of these. Each is treatable but all are undertreated, in part because people are uninsured or underinsured. A recent study pegged the costs of absenteeism and productivity losses on the job at more than $200 billion annually, or about 1.5 percent of G.D.P.

The Affordable Care Act will not eliminate these costs - people will still get sick, after all - but it is likely to reduce them. The recent Oregon Health Study, for example, found that people who gain insurance are much less likely to suffer from depression than their less fortunate peers who remain uninsured.

Are the benefits from reduced job lock, greater work among disability insurance recipients, and less absenteeism and workers ill on the job greater than the potential distortions from shifts into part-time work and increases in marginal tax rates? I do not know; no one has added up the various costs and benefits. For that reason, I did not highlight the work force implications of the Affordable Care Act when I testified before Congress. Instead, I focused on the cost savings implications of the act, which are immense and likely to be more important. I am glad that this forum allows Professor Mulligan and me a chance to discuss these other effects.

What is most clear is that the current health care system is failing families, businesses and governments. The Affordable Care Act is the most serious effort ever made to address the myriad flaws in health care today. If it works as intended, the health of our economy - as well as our people - will be much improved.

LOAD-DATE: August 12, 2013

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August 7, 2013 Wednesday

Health Care Inflation and the Arithmetic of Labor Taxes

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 1421 words

HIGHLIGHT: Data and arithmetic make clear that the Affordable Care Act could have negative effects on employment, despite the optimism of the law’s supporters, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

A modest reduction in health care inflation by itself might increase employment or number of hours worked, but the effect will be overwhelmed by new taxes coming into effect in the next two years.

Health care and the labor market are connected because so much of the non-elderly population obtains health insurance through an employer or the employer of a family member. As the decades have gone by, Americans have been spending more and more on health care, largely through their health insurance premiums, to the point that many families cannot afford the kinds of health insurance plans in which middle- and upper-income families take part.

So it's reasonable to wonder whether the health expenditure trends affect the amount of employment in the economy, and thereby whether policy reforms that reduce the rate of health expenditure growth might reverse some of those employment effects. 

The direction of the employment effects of health care inflation is unclear, because it depends on the reasons for rising health care costs. To the degree that rising costs derive from new, valuable (but expensive) pharmaceuticals and medical procedures, rising costs may make people more attached to jobs with health benefits in order to have better access to medical innovations and to pay for them with pretax dollars.

But health economists have also pointed to less benign sources of health care inflation, including excessive malpractice penalties and a number of other health industry inefficiencies that raise employer health insurance costs without creating commensurate value for employees.

The economists Katherine Baicker and Amitabh Chandra looked at evidence suggesting that malpracticelike sources of health care inflation are economically equivalent to an implicit tax on employers (see Page 612 of their paper). Economists call it an "implicit tax" because it has many economic characteristics of a tax, even though it is not legally a tax; it reduces employee cash wages by the amount of the implicit tax, and incentive-sensitive employees respond by working less.

As the House of Representatives began to consider whether to repeal the Affordable Care Act, David Cutler of Harvard testified about the Baicker-Chandra results and asserted that the Affordable Care Act would reduce average health care costs by about 5 percent by 2015, reduce the health care cost implicit tax on employers and thereby increase nationwide employment more than it would have grown had the Affordable Care Act not been enacted.

He also organized and signed an economists' letter to Congress asserting that "repealing the Affordable Care Act would produce job reductions of 250,000 to 400,000 annually." The Affordable Care Act was cutting employer costs and Congress needn't worry that it would contract the labor market, they wrote.

Neither Professor Cutler's testimony nor the economists' letter mentioned that the Affordable Care Act also creates explicit taxes on employers, subsidies for layoffs and various implicit taxeson employees with many of the same economic characteristics as taxes on employers.

Other advocates of the Affordable Care Act dismiss the act's work disincentives as negligible, because incentives supposedly have little effect on employment and hours worked. At first glance, it might seem that we have a case of dueling experts, and that we'll never know which effect dominates. But that first impression would be incorrect, because each effect cited above - like the employer mandate or the health care cost reduction - is a tax effect, and simple arithmetic is all that is needed to determine the direction of the combined effect of all of the tax-like provisions.

After I sent Professor Cutler a draft of this post, he responded: "When I was giving my testimony, I was excluding the vast bulk of policies that will affect part-time work, job choice, etc., because I wanted to focus on the overall cost issue. I don't think you can do this right unless you include all the effects."

He agreed with me that readers of his testimony and letter might get the wrong impression that "repealing the Affordable Care Act would produce job reductions" refers to the act as a whole, when it fact it refers to the cost-reduction provisions by themselves. (He also said that neither his testimony nor my calculations quantify the effect of the health care law on job mobility and on the health of the work force, and that he believes these two employment effects to be large. I will return to those issues in a later post.)

Furthermore, Professor Cutler told me he left out explicit and implicit tax effects because he believed (and still believes) them to be less than the cost-reduction effects, and because he "didn't have a way to add them all up," referring to the various effects. Since Professor Cutler's testimony, I have shown how most of the effects can be added together because cost reduction is a tax effect comparable to the tax effect of the employer mandate, the tax effect of the subsidy for layoffs and so on (see also the methodology in Chapter 3 of my book "The Redistribution Recession").

Begin with Professor Cutler's (probably optimistic) estimate that the act will reduce employer health costs by 5 percent as of 2015. Because of the special payroll and income tax treatment of employer health insurance, 1.5 of those five percentage points of savings will accrue to government treasuries, leaving 3.5 percentage points of health care savings for employers and employees. Americans spend about 18 percent of their gross income on health care and 82 percent on other things: saving 3.5 percent on health care is like saving 0.6 percent on their total budget.

(In principle, the government treasuries could use their savings to cut marginal tax rates or increase them less than they would have. But they could also use the savings to pay for additional assistance programs that erode work incentives, so I take the middle ground and assume that the government savings by itself has no effect on marginal tax rates.)

Some cost-reducing provisions in the Affordable Care Act, such as the tax on "Cadillac" health plans or the Independent Payment Advisory Board, may reduce value received by employees at the same time that they reduce employer costs, and therefore affect employment less than cutting implicit employer taxes does. The implicit tax cut effect associated with the act's cost reductions (as estimated by Professor Cutler) is therefore somewhere in the range of 0.3 to 0.6 percentage points, with the 0.6 percentage point case representing the extreme where none of the cost-saving measures reduces employee value.

The Affordable Care Act's explicit taxes on employers, subsidies for layoffs and implicit taxes on employees, together amount to a five or six percentage point addition to the average marginal tax rate on labor income (this includes the fact that many people will not take part in programs for which they are eligible, the tendency of the act to move people off means-tested uncompensated care and the fact that the act implicitly taxes unemployment benefits, as I noted in testimony before the Human Resources Subcommittee of the House Ways and Means Committee). By these calculations, the tax effects that Professor Cutler left out are about 10 times greater than, and in the opposite direction of, those he conveyed to Congress.

Professor Cutler projected that the Affordable Care Act's cost reductions by themselves will increase employment in 2015 by about 400,000, or about 0.3 percent of total employment (see Figure 2 in his testimony). If his estimate of the cost-savings channel is accurate, and I am right that the overall labor market effect of the act is about 10 times larger (in the other direction) than the cost-savings channel, we might then expect the act to contract the 2015 labor market by about 3 percent rather than expand it.

As time goes by and additional research results become available, it increasingly appears that even the experts failed to fully appreciate the labor-market-depressing effects of the Affordable Care Act at the time it was passed.

LOAD-DATE: August 12, 2013

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March 19, 2014 Wednesday

'Romneycare' and the 29ers

SECTION: BUSINESS; economy

LENGTH: 534 words

HIGHLIGHT: The Affordable Care Act is far more likely to cause disruptions in the labor market than the Massachusetts health reform of 2006, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."  

Health reform in Massachusetts in 2006 did not cause many workers to have their work hours cut, but that is no comfort for those workers nationwide who will begin to experience this side effect of the federal Affordable Care Act.

Business executives have been saying that they have, or will be, cutting workers' hours to avoid penalties levied by the Affordable Care Act. Because the penalties are applied only to full-time workers (defined by the law as working 30 hours a week or more), redefining a worker as a part-time - a "29er," as they are sometimes called - might save the employer money and enhance profits.

But a skeptical listener might not interpret the executives' statements literally. In any economy, there are businesses that struggle, and maybe it's too easy to blame the unpopular new law for deeper business difficulties.

Massachusetts also had a health reform law - sometimes called "Romneycare" after Gov. Mitt Romney, who signed it - with some of the same elements as the Affordable Care Act, including penalties on employers that did not offer health coverage to their employees. Yet Massachusetts did not seem to experience a crisis of 29ers when Romneycare was implemented.

The Washington Examiner quoted an unidentified Department of Health and Human Services official as saying that the experience in Massachusetts suggests that "the health care law will improve the affordability and accessibility of health care without significantly affecting the labor market." But a closer look  shows that the Massachusetts experience tells us little about the number of 29ers that will be created by the Affordable Care Act.

For one, the Romneycare employer mandate was not based on the number of full-time employees. It was based on the number of full-time-equivalent employees, which means that workers are counted according to the number of hours they work, not their full-time status.

For example, cutting all workers' hours to 39 from 40 would have the same penalty consequence under Romneycare as would cutting 1/11th of workers' hours to 29 from 40. In Massachusetts employers could choose how to cut employee hours (if at all) on the basis of business and personal considerations; the federal law would only give relief to the 29er approach.

Second, the Romneycare penalty was deductible from an employer's business taxes; the Affordable Care Act's penalties will not be deductible. A Massachusetts employer avoiding the health reform's penalty would find that his avoidance increased his business tax liability a bit.

Finally, the Romneycare penalty was only about $300 per full-time equivalent employee, whereas the Affordable Care Act's penalty is $2,000 and set to grow with the rate of health care inflation.

For now, it may be worth listening to what the business executives are saying.

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October 1, 2013 Tuesday

What Does the Affordable Care Act Mean for Your Business?

BYLINE: ROBB MANDELBAUM

SECTION: BUSINESS; smallbusiness

LENGTH: 397 words

HIGHLIGHT: If you are a small-business owner with employees, please take a few minutes to fill out the survey.

It's been three and a half years since the Affordable Care Act became the law of the land, and the enormous changes it will bring to the American health insurance market are upon us. As of Tuesday - glitches and delays aside - small-business owners and individuals are able to begin shopping for health insurance policies on online exchanges, and in many cases receive tax credits to offset the cost. 

There are preliminary indications that the health care law may already be having positive impacts on both individual premiums and underlying medical costs. But setbacks have bedeviled the law, especially the parts specifically aimed at small companies. The tax credits to help small businesses defray the cost of covering employees have been judged too parsimonious by some to induce many businesses to obtain new coverage. The Internal Revenue Service has been slow to write rules governing the law's so-called employer mandate. The Small Business Health Options exchanges, as they are known, have had several problems - including the White House's recent acknowledgement that small businesses will not be able to enroll online through the exchanges until November. (They should be able to enroll by phone or fax this month.)

As the Affordable Care Act has lurched toward implementation, the voices of small businesses have been somewhat missing from the discussion of what happens next - at least, that is, the unmediated voices of small businesses. Advocates on both sides of the issue are always happy to find a small-business owner with a pre-existing point of view when a reporter calls.

With the law upon us, The Times would like to hear directly from small-business owners. We've put together an online questionnaire to ask how you have prepared for the Affordable Care Act's arrival and the concrete ways that you think it may affect your business. If you are a small-business owner with employees, please take a few minutes to fill out the survey. We'll use the results to inform our reporting in the hope that it will help all of us understand what the changes mean and what is likely to come next.

LOAD-DATE: October 2, 2013

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The New York Times

January 23, 2017 Monday 00:00 EST 

Senators Propose Giving States Option to Keep Affordable Care Act

BYLINE: ROBERT PEAR

SECTION: US; politics

LENGTH: 981 words

HIGHLIGHT: Bill Cassidy of Louisiana and Susan Collins of Maine, both Republicans, say states could also choose to receive federal money for their own plans.

WASHINGTON - Several Republican senators on Monday proposed a partial replacement for the Affordable Care Act that would allow states to continue operating under the law if they choose, a proposal meant to appeal to critics and supporters of former President Barack Obama's signature health law.

But the plan was attacked by Democrats as a step back from the Affordable Care Act's protections, and it was unlikely to win acceptance from conservative Republicans who want to get rid of the law and its tax increases as soon as possible. If anything, the proposal - by Senators Bill Cassidy of Louisiana, a medical doctor, and Susan Collins of Maine, a moderate Republican - may show how difficult it will be for Republicans to enact a replacement for the Affordable Care Act. 

Legislation that can pass muster in the more conservative House may not win enough support in the Senate. A bill with broad appeal in the Senate may fail in the House.

Under the proposal, states could stay with the Affordable Care Act, or they could receive a similar amount of federal money, which consumers could use to pay for medical care and health insurance. "We are moving the locus of repeal to state government," Mr. Cassidy said. "States should have the right to choose."

The proposal shares some features with House Republican proposals: It would encourage greater use of health savings accounts and eliminate the requirement for most Americans to have insurance or pay a tax penalty. But the option for states to keep the Affordable Care Act alive will rankle the most conservative Republicans who have been trying for nearly seven years to blow it up.

"Obamacare is flawed, failing and not fixable, and it needs to be fully repealed," said Representative Mark Meadows of North Carolina, the chairman of the House Freedom Caucus.

A stalemate between the House and Senate would leave in place Mr. Obama's health law, but efforts by President Trump and Congress to undermine it could send health insurance markets into a tailspin. On Friday, as one of his first official acts as president, Mr. Trump signed an executive order that could allow officials to ease up on enforcement of the mandate requiring most Americans to have insurance.

Supporters of the Affordable Care Act panned the Cassidy-Collins proposal. "Millions of Americans would be kicked off their plans, out-of-pocket costs and deductibles for consumers would skyrocket, and protections for people with pre-existing conditions, such as cancer, would be gutted," said the Senate Democratic leader, Chuck Schumer of New York.

Ronald F. Pollack, the executive director of Families USA, a liberal-leaning consumer group, said the bill "falls way short of providing the protections and coverage people have under the Affordable Care Act."

Ms. Collins said the bill would allow states to "keep the Affordable Care Act if it is working for their residents." But she predicted that most states would choose something different.

Under the Cassidy-Collins bill, states could enroll people who would otherwise be uninsured in health plans providing basic coverage. These high-deductible health plans are intended to protect consumers against catastrophic medical expenses. They would cover generic versions of prescription drugs, and they would also have to cover recommended childhood immunizations without co-payments. States would contract with one or more insurers to offer this coverage.

Consumers could buy "more robust coverage" if they want, Mr. Cassidy said, but they could be automatically enrolled, by default, in the high-deductible health plans providing basic coverage. "A state could say, 'All those eligible are enrolled unless they choose not to be,'" he explained.

This "passive enrollment" would provide insurers with a large pool of customers, including many healthy people, without the coercion of an "individual mandate," Mr. Cassidy said.

"We think that we could cover more people than Obamacare," Mr. Cassidy said, although he acknowledged that the effects of his bill had not been analyzed by the Congressional Budget Office, which serves as Capitol Hill's official scorekeeper.

If a state opts out of the Affordable Care Act, many of the federal insurance standards established under the law would no longer apply. The bill would repeal federal benefit mandates that "often force Americans to pay for coverage they don't need and can't afford," Mr. Cassidy said.

But some protections would remain in place. Parents would still be allowed to keep children on their insurance until the age of 26, and insurers could not impose annual or lifetime limits on benefits.

The Cassidy-Collins bill, called the Patient Freedom Act, would eliminate not only the unpopular individual mandate, but also the federal requirement for larger employers to offer coverage to full-time employees.

Mr. Cassidy said that Senators Shelley Moore Capito of West Virginia and Johnny Isakson of Georgia, both Republicans, were also sponsors of the bill.

The Senate majority leader, Mitch McConnell, Republican of Kentucky, and the No. 2 Senate Republican, John Cornyn of Texas, were sponsors of a similar bill that Mr. Cassidy introduced in 2015. But the legislative landscape is different now. Republicans in Congress can repeal the Affordable Care Act, with support from Mr. Trump. In the Senate, they will need help from Democrats to adopt a replacement because Republicans are eight votes shy of the 60 needed to stop a filibuster.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

PHOTO: Senators Susan Collins and Bill Cassidy introduced legislation on Monday in Washington to replace the Affordable Care Act.(PHOTOGRAPH BY J. SCOTT APPLEWHITE/ASSOCIATED PRESS)

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LOAD-DATE: January 26, 2017

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The New York Times Blogs
(Economix)

February 26, 2014 Wednesday

The Affordable Care Act's Multiple Taxes

SECTION: BUSINESS; economy

LENGTH: 886 words

HIGHLIGHT: A new tax created by the Affordable Care Act and little noticed to date is likely to have significant impact on the labor market, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

The Affordable Care Act contains at least two economically distinct taxes on labor market activity. Even the experts on the law have failed to recognize all of them.

The Affordable Care Act tries to make health insurance affordable by offering means-tested subsidies and tax credits to households so they can make their payments for monthly health insurance premiums and out-of-pocket health expenses like deductibles and copayments for medical services. 

This assistance is means-tested because higher-income households get less assistance than lower-income households. As a household's income rises, it has to pay more for the same coverage. As a matter of economics, it wouldn't have been much different if the law had given assistance to all households and then paid for it with a new income tax that was capped once household income hits 400 percent of the federal poverty line.

Naturally, income taxes discourage people from doing the things that create income. This is not to say that everyone responds to every tax, just that the average result of an additional income tax is less income.

Economists have long understood and publicized the implicit income taxes that come with attempts to make health care affordable. As my fellow Economix blogger Uwe Reinhardt put it 20 years ago (in an article with Alan B. Krueger) about one specific subsidy plan, health insurance premium assistance "would present millions of low-income American families with total marginal tax rates in excess of 75 percent." Professor Reinhardt also noted recently that the marginal tax rate implicit in any particular health insurance proposal depends very much on the features of that plan.

The Congressional Budget Office also highlighted this issue as the Affordable Care Act was going through Congress. Daniel P. Kessler, a Stanford professor, also discussed it in a commentary in 2011.

Under the Affordable Care Act, only a small minority of workers is expected to get subsidized coverage. So economists concluded that aggregate labor market effects of the new law would be minimal.

I would agree if the implicit income tax were the only new tax on labor market activity in the new law. But there's more: The Affordable Care Act also contains a new implicit tax on employment that affects far more people than its implicit income tax does.

Income taxes and employment taxes are not the same, because the income tax is based on income and the employment tax is based on employment. Two households with the same family structure (in number and age of family members) and annual income who live in the same county will not necessarily get the same assistance from the Affordable Care Act. The household that is employed more months of the year is likely to get less assistance (and maybe no assistance) from the new law, because the law requires that, during the months that they are employed, full-time workers get health coverage from their employer before they turn to the new health insurance marketplaces for federal government subsidies.

To put it another way, even if the health insurance subsidies in the Affordable Care Act had been a specific dollar amount that was not phased out with household income, the law would still act as a tax on employment because most workers could not get the assistance during the months they were at work.

This new implicit employment tax will apply to tens of millions of workers who are offered health insurance on their job and to millions of non-employed persons who are considering a position that offers coverage.

(The new employment tax also changes the types of jobs that are created and accepted by workers, but this effect does not prevent the law from reducing employment, as Trevor Gallen and I explain).

As far as I know, before this month the only place that one could read about the Affordable Care Act's new employment tax was in by David Gamage, in posts I have written for this blog, in my 2012 book or in a 2013 paper. Even though the consequences of the law have been debated at least as far back as 2009, the law's advocates have yet to acknowledge the new implicit employment tax, let alone estimate the number of people who will face it.

But in a recent paper, the Congressional Budget Office has joined me in explaining that it's not just the implicit income tax that will contract the labor market. As the paper puts it, "The loss of subsidies upon returning to a job with health insurance is an implicit tax on working," adding that the effect of the new tax is "similar to the effect of unemployment benefits" (see Page 120).

Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.

LOAD-DATE: February 26, 2014

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The New York Times

January 24, 2017 Tuesday  
Late Edition - Final

A G.O.P. Health Care Bill Would Let States Opt In

BYLINE: By ROBERT PEAR

SECTION: Section A; Column 0; National Desk; Pg. 15

LENGTH: 936 words

WASHINGTON -- Several Republican senators on Monday proposed a partial replacement for the Affordable Care Act that would allow states to continue operating under the law if they choose, a proposal meant to appeal to critics and supporters of former President Barack Obama's signature health law.

But the plan was attacked by Democrats as a step back from the Affordable Care Act's protections, and it was unlikely to win acceptance from conservative Republicans who want to get rid of the law and its tax increases as soon as possible. If anything, the proposal -- by Senators Bill Cassidy of Louisiana, a medical doctor, and Susan Collins of Maine, a moderate Republican -- may show how difficult it will be for Republicans to enact a replacement for the Affordable Care Act.  

Legislation that can pass muster in the more conservative House may not win enough support in the Senate. A bill with broad appeal in the Senate may fail in the House.

Under the proposal, states could stay with the Affordable Care Act, or they could receive a similar amount of federal money, which consumers could use to pay for medical care and health insurance. ''We are moving the locus of repeal to state government,'' Mr. Cassidy said. ''States should have the right to choose.''

The proposal shares some features with House Republican proposals: It would encourage greater use of health savings accounts and eliminate the requirement for most Americans to have insurance or pay a tax penalty. But the option for states to keep the Affordable Care Act alive will rankle the most conservative Republicans who have been trying for nearly seven years to blow it up.

''Obamacare is flawed, failing and not fixable, and it needs to be fully repealed,'' said Representative Mark Meadows of North Carolina, the chairman of the House Freedom Caucus.

A stalemate between the House and Senate would leave in place Mr. Obama's health law, but efforts by President Trump and Congress to undermine it could send health insurance markets into a tailspin. On Friday, as one of his first official acts as president, Mr. Trump signed an executive order that could allow officials to ease up on enforcement of the mandate requiring most Americans to have insurance.

Supporters of the Affordable Care Act panned the Cassidy-Collins proposal. ''Millions of Americans would be kicked off their plans, out-of-pocket costs and deductibles for consumers would skyrocket, and protections for people with pre-existing conditions, such as cancer, would be gutted,'' said the Senate Democratic leader, Chuck Schumer of New York.

Ronald F. Pollack, the executive director of Families USA, a liberal-leaning consumer group, said the bill ''falls way short of providing the protections and coverage people have under the Affordable Care Act.''

Ms. Collins said the bill would allow states to ''keep the Affordable Care Act if it is working for their residents.'' But she predicted that most states would choose something different.

Under the Cassidy-Collins bill, states could enroll people who would otherwise be uninsured in health plans providing basic coverage. These high-deductible health plans are intended to protect consumers against catastrophic medical expenses. They would cover generic versions of prescription drugs, and they would also have to cover recommended childhood immunizations without co-payments. States would contract with one or more insurers to offer this coverage.

Consumers could buy ''more robust coverage'' if they want, Mr. Cassidy said, but they could be automatically enrolled, by default, in the high-deductible health plans providing basic coverage. ''A state could say, 'All those eligible are enrolled unless they choose not to be,''' he explained.

This ''passive enrollment'' would provide insurers with a large pool of customers, including many healthy people, without the coercion of an ''individual mandate,'' Mr. Cassidy said.

''We think that we could cover more people than Obamacare,'' Mr. Cassidy said, although he acknowledged that the effects of his bill had not been analyzed by the Congressional Budget Office, which serves as Capitol Hill's official scorekeeper.

If a state opts out of the Affordable Care Act, many of the federal insurance standards established under the law would no longer apply. The bill would repeal federal benefit mandates that ''often force Americans to pay for coverage they don't need and can't afford,'' Mr. Cassidy said.

But some protections would remain in place. Parents would still be allowed to keep children on their insurance until the age of 26, and insurers could not impose annual or lifetime limits on benefits.

The Cassidy-Collins bill, called the Patient Freedom Act, would eliminate not only the unpopular individual mandate, but also the federal requirement for larger employers to offer coverage to full-time employees.

Mr. Cassidy said that Senators Shelley Moore Capito of West Virginia and Johnny Isakson of Georgia, both Republicans, were also sponsors of the bill.

The Senate majority leader, Mitch McConnell, Republican of Kentucky, and the No. 2 Senate Republican, John Cornyn of Texas, were sponsors of a similar bill that Mr. Cassidy introduced in 2015. But the legislative landscape is different now. Republicans in Congress can repeal the Affordable Care Act, with support from Mr. Trump. In the Senate, they will need help from Democrats to adopt a replacement because Republicans are eight votes shy of the 60 needed to stop a filibuster.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2017/01/23/us/politics/senate-affordable-care-act-bill-cassidy-susan-collins-trump.html

LOAD-DATE: January 25, 2017

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GRAPHIC: PHOTO: Senators Susan Collins and Bill Cassidy introduced legislation on Monday in Washington to replace the Affordable Care Act.(PHOTOGRAPH BY J. SCOTT APPLEWHITE/ASSOCIATED PRESS)

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The New York Times Blogs
(Economix)

July 2, 2013 Tuesday

Confusing the Public on the Affordable Care Act

BYLINE: UWE E. REINHARDT

SECTION: BUSINESS; economy

LENGTH: 1286 words

HIGHLIGHT: Many opponents of the Affordable Care Act have used cautionary warnings of its impact, and some of them are jam-packed with misleading information, an economist writes.

Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

In my previous post I explained that general statements on the probable impact of the Affordable Care Act on the pocketbooks of Americans often do not make sense and can be quite misleading.

My point can be illustrated with a recent news release from the Ohio Department of Insurance, "Health Insurance Costs to Increase Significantly Under Affordable Care Act." The department states that it "released the information today to help health insurance consumers continue to prepare for the expected price increases." It offers a one-sided perspective.

In its announcement, the department reports: 

The department's preliminary analysis of the proposed plans for the individual market reveal that insurers expect the cost to cover health care expenses for consumers will significantly increase. Based on a report released by the Society of Actuaries earlier this year, the department estimates this increase is an average of 88 percent. ... A total of 14 companies filed proposed rates for 214 different plans to the department. Projected costs from the companies for providing coverage for the required essential health benefits ranged from $282.51 to $577.40 for individual health insurance plans.

Presumably these numbers refer to claims cost and not premiums.

The release is silent on whether the reported average of $420 of this wide range of claims costs are those for a given benefit package or an average over quite different benefit packages. If the former, how could the range of cost claims be so wide? If the latter, the reported average of these numbers would be meaningless. After all, how informative would it be to say that the average cost for a group of cars is $110,422, when that includes Chevrolets, Jeeps, BMWs and Ferraris?

If properly informing consumers had been truly the department's intention, it should have added at least two additional pieces of information.

First, the news release should have reminded readers explicitly that income-related federal subsidies toward health insurance premiums will be available for individuals with household incomes up to 400 percent of the federal poverty level, along with "cost-sharing subsidies" toward out-of-pocket costs for families with incomes between 100 and 250 percent of the federal poverty level. For lower-income people, these subsidies will significantly offset premiums driven up by the reported 88 percent increase in costs.

Second, the news release might have included some explanation of why the "cost to cover health care expenses for consumers" in Ohio is expected to rise as a result of the Affordable Care Act.

A clue to the answer can be gained from the study by the Society of Actuaries cited by the department.

That study reports average claims costs per member per month for what it calls the "pre-A.C.A." and the "post-A.C.A." state of affairs. The pre-A.C.A. figure represents estimated claims cost per insured person per month in 2014 if the Affordable Care Act did not exist. The post-A.C.A. estimate reflects the counterfactual assumption that the entire act has been fully carried out in 2014, something that actually will occur only by the latter half of the decade.

Using a highly complex simulation model, the actuaries estimate that if the Affordable Care Act were fully carried out by 2014, the average claims cost per member per month in Ohio's nongroup risk pools would rise from an estimated pre-A.C.A. level of $223 (Figure S-2, Page 8) to the post-A.C.A. level of $406, an 82 percent increase, assuming no expansion of Medicaid in Ohio. The increase in systemwide total health spending in Ohio brought on by the Affordable Care Act, however, is estimated to be only 3.2 percent.

Aside from the fact that the minimally accepted package of essential benefits under the Affordable Care Act will be more generous and costly than many of the much leaner policies traditionally sold in the nongroup market, that can leave people exposed to high financial risk, a major driver of the projected cost increase - one explicitly flagged by the actuaries - is a projected change in the risk profile of the insured in Ohio's nongroup market.

The Society of Actuaries projects that the number of individuals insured in that market will increase from the pre-A.C.A. level of 415,000 to the post-A.C.A. level of one million. Many of these newly insured are projected to be relatively sicker individuals who had been excluded from Ohio's nongroup market, either because they could not afford the high premiums they were quoted, based as these were on the individual's health status; or because insurers had refused them coverage outright; or because they were in the state's high-risk pool.

Just last week Julie Appleby of the Kaiser News Network reported on the tribulations that individuals had routinely experienced in the current, pre-A.C.A. nongroup market.

The proponents of the Affordable Care Act should not deny that with this simulated change in the risk profile of Ohio's nongroup insurance market - which may or may not come about - a switch from medically underwritten premiums to community-rated premiums, coupled with a richer benefit package, could significantly raise premiums for healthy individuals with higher incomes who are not entitled to substantial federal subsidies or any at all. The Ohio Insurance Department's news release certainly drives home that point.

On the other hand, for projected new entrants into Ohio's nongroup market who are relatively less healthy, the community-rated premiums even before federal subsidies are most likely to be significantly lower than their medically underwritten pre-A.C.A. premiums - if they had been offered coverage at all. A forthright news release would have mentioned that positive outcome as well.

From the "fact sheet" that the Department of Insurance appended to its news release, one gathers that Ohio's lieutenant governor, Mary Taylor, who also acts as director of the Department of Insurance, opposes the Affordable Care Act and supports its repeal. In the fact sheet, her department notes:

Health insurance today is priced based on individual characteristics. Those with healthier lifestyles are rewarded with more affordable options. Under the A.C.A., all Ohioans will be lumped together for the purposes of pricing thereby eliminating the benefits of healthier choices. This method of rating is commonly known as "community rating. ... Because Ohio is being forced into this type of pricing, health insurance costs are increasing in 2014.

I can understand how community rating violates the theory of justice espoused by libertarians. In fact, I have proposed a way to accommodate their preferred social ethic. The department's rationale for opposing what it calls "one-size-fits-all pricing," however, astonishes me.

One can agree that an individual's choice of an unhealthy lifestyle can reduce her or his health status and increase that person's use of health care. Community rating gives such people a financial break we would rather not give them.

But many serious and often devastating illnesses afflicting individuals are a result of accidents, or genetic or environmental factors that have little to do with lifestyle choices. The many victims of such illnesses, in Ohio as elsewhere, might interpret the Ohio Insurance Department's rather crudely put theory of the causation of illness as an insult added to injury.

LOAD-DATE: July 5, 2013

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(Economix)

November 25, 2013 Monday

The Single-Payer Alternative

BYLINE: NANCY FOLBRE

SECTION: BUSINESS; economy

LENGTH: 900 words

HIGHLIGHT: A single-payer system of health insurance would be more consumer-friendly, as well as more cost-effective than the Affordable Care Act, an economist writes.

Nancy Folbre is professor emerita of economics at the University of Massachusetts, Amherst.

Rush Limbaugh's take on the disastrous rollout of the Affordable Care Act could, ironically, warm the hearts of those at the other end of the political spectrum. He contends that President Obama knew all along that the Affordable Care Act would crash and burn, but pushed it through so that the conflagration would clear the way for single-payer health insurance.

The conspiracy charge sounds deranged, but problems with the new health insurance system may indeed revitalize demands for more substantive reforms, which many policy makers and voters set aside in the putative interests of political pragmatism. Whatever the advantages of a single-payer system such as that currently administered by Medicare, one view held, American voters were unlikely to get behind it. 

Yet one of the greatest advantages of a single-payer system - its relatively low administrative costs - have been thrown into sharp relief by problems registering with the new health exchanges. And while Republicans despise the Affordable Care Act despite its conformity with many of their earlier proposals, their proposed changes (other than simple rollback) look complicated, kludgy and costly to administer.

The malfunctioning website has magnified problems inherent in coordinating enrollment across many different companies in many different exchanges in cooperation with many different government agencies. The harmonization challenges are orders of magnitude greater than those faced by a single company or a single state, making streamlining difficult. Improved software can do only so much.

In theory, competition and choice should increase efficiency. In practice, health insurance companies are able to take advantage of the complexity and uncertainty surrounding health care choices to make comparison shopping very difficult.

Lack of clear information about the prices of medical procedures, combined with a proliferation of insurance options whose potential benefits will be strongly affected by unpredictable events (such as being involved in an automobile accident or developing cancer), put consumers in a weak position.

The process of negotiating relationships with new health care providers because old ones are "out of network" is physically and emotionally exhausting. Insurance companies benefit from promoting policies that are difficult to understand and make consumers fearful of any change in their coverage. That fear and aversion has spilled over into the transactions required for many people to benefit from the Affordable Care Act.

David Himmelstein and Steffie Woolhandler, co-founders of Physicians for a National Health Program, regularly assert that elimination of the huge paperwork and overhead imposed by private insurance companies could save enough to cover the estimated 31 million of Americans who will remain uninsured under the Affordable Care Act.

My fellow Economix blogger Uwe E. Reinhardt, expanding on this theme, notes that the Institute of Medicine of the National Academy of Sciences recently estimated excess administrative costs of $191 billion, again more than enough to attain truly universal health care coverage.

Most such estimates are limited to the monetary costs incurred by insurers, doctors and hospitals and don't include the value of the time that health care consumers must devote to managing a torrent of inscrutable paperwork that can become truly frightening for the critically ill.

Even if its rollout becomes more expeditious, the Affordable Care Act does little to reduce the incentives that companies have to barricade themselves behind high information and transaction costs. In the financial sector, I previously noted, this perverse incentive is described as "strategic price complexity."

A complicated new program applied to a complicated old industry makes it hard for everyone to figure out exactly what they will be getting relative to what they are paying. As a result, many ordinary people and small businesses fall prey to redistributional paranoia.

Accusations of ripoffs proliferate, along with assertions that the Affordable Care Act is unfair to young people or that it simply represents transfers from the affluent to the poor, or from whites to people of color.

The program clearly has redistributive impact, but much of it will be muted over the life cycle. People who pay more for their insurance will get more benefits in return. The biggest transfers will go from the healthy to the sick (who are sometimes poor precisely because they are sick) and from one part of the health care system (emergency room care) to another (insurance-covered routine care).

But the structure of the program seems unintentionally designed to intensify distributional conflict. Its highly means-tested subsidies create strong political resentments and contribute to very high implicit marginal tax rates on lower-income families.

A single-payer insurance system, whether based on an extension of Medicare or on the Canadian model, promises many profoundly important benefits. Right off the mark, it promises simplicity.

No wonder conservative pundits are afraid of it.

LOAD-DATE: November 25, 2013

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(Economix)

March 28, 2012 Wednesday

Further Reading on Mr. Mandate

BYLINE: CATHERINE RAMPELL

SECTION: BUSINESS; economy

LENGTH: 231 words

HIGHLIGHT: A bibliography on Jonathan Gruber, the health economist who helped design the Affordable Care Act and the Massachusetts health plan enacted under Gov. Mitt Romney.

I have a profile now online about Jonathan Gruber, an economics professor at M.I.T. He helped design both the universal health care overhaul in Massachusetts and the Affordable Care Act, and is probably the economist most closely associated with the idea of an individual insurance mandate.

Here's a short bibliography on Mr. Gruber, for those interested in reading more about the professor and his work.

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The New York Times Blogs
(The Learning Network)

April 3, 2014 Thursday

6 Q's About the News | Obama Claims Victory in Push for Insurance

SECTION: EDUCATION

LENGTH: 217 words

HIGHLIGHT: How many Americans have signed up for private health insurance plans under the Affordable Care Act? 

In "Obama Claims Victory in Push for Insurance," Michael D. Shear and Robert Pear write about a milestone for the Affordable Care Act. Use the video above as well as the article to answer these questions:  

HOW many Americans have signed up for private health insurance plans under the Affordable Care Act?

WHAT happened last October when HealthCare.gov first opened that made it a "bureaucratic and technical nightmare"?

WHAT did President Obama mean by saying, "Armageddon has not arrived"?

WHAT questions that will help determine the law's success are still to be answered?

WHY do many Republicans want to repeal the Affordable Care Act?

WHEN is the next open enrollment season?

WHOM, if anyone, do you know who has signed up for health insurance under the Affordable Care Act?

For Higher-Order Thinking

The article describes this milestone as "more significant politically than for what it says about the law's potential impact on the American health system." WHY?

WHY is it important to the success of the law that as many young, healthy people as possible sign up

LOAD-DATE: April 3, 2014

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The New York Times

October 27, 2014 Monday  
The New York Times on the Web

Trajectory of Costs Levels Off, but There Are Many Reasons

BYLINE: By MARGOT SANGER-KATZ

SECTION: Section ; Column 0; National Desk; SPENDING; Pg.

LENGTH: 820 words

Health care spending had begun slowing even before the Affordable Care Act was signed into law.

The reasons included recession, higher-deductible policies that discourage people from seeking health care services, and a decline in the development of new, costly prescription drugs.

But reductions in wasteful or unneeded care may also be factors in the slowdown, and experts say the Affordable Care Act may help reinforce those changes. 

In the short term, the law could actually drive up health care spending by bringing more insured people into the system.

For decades, health care costs have been rising much faster than the rest of the American economy, outrunning inflation and wages and driving a growing imbalance in the federal budget. With the Affordable Care Act, President Obama promised to slow it all down. The law, he said often, would ''bend the cost curve,'' flattening health spending's precipitous rise and making health care more affordable for the country.

The last few years have seen a significant slowdown in the growth of health spending. Across nearly every measure -- medical price growth, employer insurance premiums, per capita Medicare spending -- the amounts the country spends on health care have increased by much smaller margins than the nation is used to.

But it is hard to make a case that the Affordable Care Act deserves substantial credit for the recent trend -- though it may be helping to nudge it along. The spending slowdown began before the law was even written. The major provisions of the law intended to slow down spending growth have mostly come in the form of small-scale experiments, and studies of those programs have shown mixed results.

The law's signature Medicare initiative, the Accountable Care Organization, has yet to demonstrate the savings its authors promised; recent results from the Department of Health and Human Services show that only a fraction of participating systems have succeeded in saving money.

Meanwhile, the growth in health spending has been slowing down around the world, suggesting that the cause may not be something special happening in this country.

Health economists have been alternately celebrating the slowdown and puzzling over it. A series of studies have tried to examine what factors have caused it, with an eye to determining whether the trend is here to stay. The typical answer includes the recession (individuals and hospitals, facing financial stresses, reduced their health care spending); the rise of high-deductible health insurance plans; the loss of patent protection for many blockbuster drugs, leading to the use of more low-cost generics; and changes in the way medical care is being delivered.

Those changes in health care delivery are the most likely among all the factors to be related to health policy. The authors of the Affordable Care Act believed that the key to wringing dollars out of the health care system was reducing unnecessary and wasteful care that cost money without helping patients. If the health care system is starting to do that, and new policy helps reward the welcome change, then there is a chance that the trend could hold.

Optimists about the Affordable Care Act tend to point to hospital readmissions -- when a patient leaves the hospital only to bounce back within a month -- as an example of how policy is helping medical care become cheaper and better. Historically, hospitals had little financial incentive to prevent readmissions since they got paid for both visits. The Affordable Care Act began imposing penalties on hospitals with a lot of readmissions, and in just a few years the number declined. But readmissions represented only a tiny fraction of medical spending, so they cannot explain too much of the overall slowdown.

For that reason, Peter R. Orszag, the former Obama administration budget director and now a vice chairman at Citigroup, thinks that the Affordable Care Act should get only partial credit for the slowdown. ''I view it as kind of an accelerant and reinforcement,'' he said of the law.

In the short term, the health law could actually increase health care spending. Recent measures of the gross domestic product already show an uptick in the use of health care services this year, the expected effect of expanding health insurance coverage to millions of Americans who did not have it before. Even if the price of services is not going up and medical practice is less wasteful, more people seeing doctors and filling prescriptions is going to cost more money.

But the real long-term test of the health law will be whether, once those new people are absorbed into the system, the current downward trend in spending growth can be sustained.

''The experiment is on, and everyone knows they're a lab rat,'' said Douglas J. Holtz-Eakin, the president of the right-leaning American Action Forum and a former director of the Congressional Budget Office. ''Now we'll see if it sticks.''

URL: http://www.nytimes.com/2014/10/27/us/has-the-law-contributed-to-a-slowdown-in-health-care-spending.html

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January 13, 2017 Friday 00:00 EST 

The Republicans vs. Obamacare;
Letters

SECTION: OPINION

LENGTH: 590 words

HIGHLIGHT: Readers fault the Republicans for a rash act.

To the Editor:

Re "The Fight for Health Care Has Begun" (column, Jan. 10): David Leonhardt is correct about the Republicans' wish to crush the Affordable Care Act. But their likely strategy is one of neglect. They will shout "repeal, repeal" and cause such confusion that some insurance companies will drop out, premiums will rise and patients will be so uncertain about their options that they will not sign up.

The G.O.P. will then say "see, it's a failure" and offer unworkable travesties like high-risk pools. The Republicans can then move on with their real agenda to privatize Medicare and provide starvation block grants to unravel Medicaid. 

JAMES WEBSTER

Santa Fe, N.M.

The writer is professor emeritus of medicine at the Feinberg School of Medicine, Northwestern University.

To the Editor:

Re "Trump Orders Swift Remake of Health Act" (front page, Jan. 11):

Poor Donald! He apparently believed the Republican rhetoric that Obamacare failed. In publicly exhorting his party's congressional majority to repeal the Affordable Care Act and come up with a replacement at or near the same time, he doesn't realize that his party doesn't have and never did have a replacement, despite years of its repeated votes to repeal the law.

And the only effective replacement that won't explode the deficit would either be essentially the same as the Affordable Care Act or a single-payer insurance system. Sad!

SHARON MORRISON

Whitefish, Mont.

To the Editor:

The reason Republicans can't come up with a replacement for the Affordable Care Act is that it was their plan in the first place. It was devised at the conservative Heritage Foundation, enacted in Massachusetts by Gov. Mitt Romney, a Republican, and is essentially a market-based system to require people to buy private health insurance.

Privatization is the Republicans' solution to every problem (see also: education, infrastructure), and now that President Obama has tried it, they have nowhere else to turn. It is hard to understand how this simple truth has escaped attention in the public discourse.

ROBERT NEUGEBOREN

Cambridge, Mass.

To the Editor:

Re "Health Lobby Quiet as Law Faces Repeal" (front page, Jan. 10):

Why are the health care lobbyists and executives "stunned" at the speed with which the Republicans are trying to repeal the Affordable Care Act in Congress? Election Day should have been their wake-up call to expect and prepare for yet another bill to repeal Obamacare.

You report that the president of the Greater New York Hospital Association said health care executives "don't want to get on the wrong side of the new administration or the Republican majority in Congress." These health care executives seem to cower rather than stand up for the millions who could lose health care coverage and watch as the health system is dismantled.

At this pivotal time, we need those in power to stand up for what is right and honorable especially for those in need.

JACQUELINE JONES

Portland, Ore.

To the Editor:

I doubt that companies "were afraid to speak out" merely because "they feared that Mr. Trump would attack them on Twitter." Unlike Donald Trump, companies don't have fragile egos that can be damaged by a tweet. They might lose some customers, but probably not a decisive number.

More likely, the companies are afraid that Mr. Trump will mark them for revenge, and use presidential powers to exact it. They may also fear that business partners will shun a company at odds with Mr. Trump.

Such thinking is common in dictatorships. Is that where we're headed?

ILYA SHLYAKHTER

Cambridge, Mass.

LOAD-DATE: January 14, 2017

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The New York Times

April 23, 2017 Sunday  
Late Edition - Final

Obama's Health Law: A Tale of 2 Red States

BYLINE: By ABBY GOODNOUGH and REED ABELSON; Abby Goodnough reported from Bartlesville, and Reed Abelson from New York.

SECTION: Section BU; Column 0; Money and Business/Financial Desk; Pg. 1

LENGTH: 1629 words

BARTLESVILLE, Okla. -- When President Trump describes the Affordable Care Act as ''imploding,'' Lori Roll, an insurance agent here, does not consider it hyperbole.

Only one health insurer in Oklahoma is left selling coverage through the federal marketplace, and the hospital in this city of 36,000 is not in the network. Premiums are among the highest in the country, and while most marketplace customers qualify for the Affordable Care Act's income-based subsidies that lower the cost, many of Ms. Roll's middle-class clients do not.

''A lot of them are friends,'' she said, ''and I'm having to tell them: 'My God, your premium just doubled. I'm so sorry.'''

In neighboring New Mexico, also under Republican leadership, the Affordable Care Act marketplace is in far better shape. Marketplace customers can still choose among four insurers, and the state has one of the lowest average premium costs. 

Nearly four years after they opened, the Affordable Care Act's insurance marketplaces, also known as exchanges, are not uniformly failing, as Mr. Trump claims. Instead, they have risen or fallen in no small part because of political and policy decisions by each state. New Mexico embraced the law, and its marketplace has been healthy, while Oklahoma resisted at every step, and its marketplace is foundering.

But now both states are worried that political maneuvering at the federal level may deeply destabilize the marketplaces. In an effort to get Democrats to negotiate, Mr. Trump has threatened to stop paying more than $7 billion in subsidies to insurers that don't charge deductibles and co-payments to millions of poor people. Uncertainty about the subsidies, which are a critical financial underpinning of the law, may drive more insurers out of the market -- leaving Oklahoma with no health plans in the marketplace -- and raise premiums significantly higher for those that stay.

Politics at both the state and federal levels have been critical to shaping the success and failure of the Affordable Care Act. Oklahoma and New Mexico offer a case study of how that has played out.

New Mexico expanded Medicaid as soon as the law allowed, oversees its marketplace and conducts vigorous outreach to draw in potential customers, moves that have most likely helped attract healthier customers.

Oklahoma has raged against the law since its passage, challenging its subsidies in a lawsuit and refusing to expand Medicaid or set up its own state-run insurance exchange. Instead, the federal government runs the state's marketplace through HealthCare.gov, an option taken by more than two dozen mostly Republican states.

''I was never for Obamacare from the beginning,'' John D. Doak, the Oklahoma insurance commissioner, said in an interview at his office, where a red trucker hat that says ''Make Health Insurance Great Again'' sits on his desk.

The uninsured populations in both New Mexico and Oklahoma have fallen since the law took effect. But New Mexico's progress has been stronger, even though it started with a higher rate of uninsured.

Oklahoma's uninsured rate was the third highest in the country in 2015, the most recent year available: 13.9 percent, according to the Census Bureau, compared with 17.7 percent in 2013, just before the Affordable Care Act's coverage provisions took effect. New Mexico's uninsured rate fell to 10.9 percent in 2015 from 18.6 percent in 2013.

Here in Bartlesville, an oil town that has felt the economic impact of the drop in oil prices, the anger that Ms. Roll and many of her clients feel is directed more at the health law -- and its champion, former President Barack Obama -- than at the state's unyielding resistance to it.

''You don't get on the Titanic when you know it's going to sink,'' said David Moore, 51, who owns a fishing tackle business.

Mr. Moore, a self-described ''libertarian guy'' who voted for Mr. Trump, avoided a doubling of his premiums this year by switching to a small group health plan with his wife, an audiologist, and one of her employees. But Mr. Moore, who earns too much to qualify for premium subsidies under the Affordable Care Act, still had his monthly premiums increase sharply for his plan covering his family of four, to $1,100 from $700, with a $12,000 deductible.

''My biggest problem with this is our government picking winners and losers,'' Mr. Moore said, referring to the fact that lower-income people get large subsidies under the law and higher-income people do not. ''I'm a loser. And it should not be this way.''

Cameron Jarrett, 31, is equally disappointed with his insurance options, even though his employer gives him money toward his premium and he gets a subsidy, too. He pays the rest: $303 a month for a Blue Cross plan that covers his family of three, with a $12,000 deductible.

Still, Mr. Jarrett, another Trump voter who wants the Affordable Care Act repealed, does not entirely blame the law.

''States like Oklahoma that sit on their hands and do nothing -- that's not helping,'' he said. ''If we're going to do this, let's give it every opportunity to work, even if it's not a policy I agree with over all.''

Mr. Trump and Republicans in Congress have repeatedly pointed to markets like Oklahoma's, with just a single insurer, as a sign that the Affordable Care Act exchanges are deeply troubled. But Oklahoma's individual market has never been very competitive. In New Mexico, several local insurers have long competed on the individual market, but Blue Cross has been the dominant player in Oklahoma for years, and is now the only insurer offering plans on the exchange. Even when other insurers offered plans through the Affordable Care Act marketplace during its first few years, Blue Cross scooped up by far the most customers.

In addition to big decisions, like whether to expand Medicaid, some seemingly minor ones may have influenced the marketplaces' health. Oklahoma has continued to allow about 45,000 people to keep old policies that do not meet Affordable Care Act standards. People with this type of ''transitional'' policy tend to be healthy, and may have helped the risk pool if they had been required to buy insurance through the exchange. Oklahoma is also one of three states that do not review insurers' proposed rates from year to year, ceding the job to the federal government instead.

In New Mexico, on the other hand, insurance regulators did not allow people to keep their old plans and required any insurer that sold plans through the Affordable Care Act marketplace to offer them in every county. John G. Franchini, the state's superintendent of insurance, has also negotiated rates with insurers, even denying a 52 percent increase requested by Blue Cross and Blue Shield of New Mexico for 2016.

Now, seven years after Mr. Obama signed the Affordable Care Act into law, Oklahoma is changing its stance and seeking a more active role. The state is preparing to ask the federal government's permission to change how the law works here through waivers allowed under the law. One of its proposals is to help very poor people afford private plans by giving them subsidies.

The state may also ask for permission to ''re-evaluate'' and perhaps reduce the package of essential benefits that the Affordable Care Act requires every insurance plan to have. And it wants plans under the law to be sold not through the federal marketplace, but through a program called Insure Oklahoma, which has provided subsidized coverage to a subset of low-income residents here since before the health law took effect.

The changes, which the state hopes would make insurance more affordable and provide more choices, would have to be approved by the Trump administration and in some cases by the Legislature. Most would not go into effect until 2019 at the earliest.

Meanwhile, Oklahoma, which has faced a series of budget crises because of the oil industry downturn, does not have the money to help pay insurers' costs next year, as Alaska and Minnesota are doing. So Oklahoma is looking to the Trump administration and Congress to help stabilize its marketplace in time for next year and persuade Blue Cross to stay.

Mr. Doak raised alarms last month when he wrote in a letter to Gov. Mary Fallin, a fellow Republican critic of the health law, that Blue Cross was ''making preparations to withdraw'' from the marketplace. Blue Cross, which is operated as a nonprofit insurance company, said it had not made a final decision about next year.

''We certainly want to continue to offer products in 2018,'' said Kurt Kossen, an executive at Health Care Service Corporation, Blue Cross's parent company.

Mr. Doak said that without any stabilization funds or other federal efforts to stabilize the individual insurance market, another round of steep premium increases was inevitable here.

But Blue Cross plans have been doing better in the marketplaces, and Health Care Service Corporation, which offers plans in Oklahoma, New Mexico and three other states, is losing less money. It aggressively raised prices last year, with a 75 percent average rate increase in Oklahoma.

A major factor in the insurers' losses was the decision by Congress not to fully fund a program aimed at protecting insurers during the early years of the Affordable Care Act, when the companies did not know what to charge. Mike Rhoads, the deputy insurance commissioner, said Blue Cross ''started too low,'' with some of the lowest prices in the country in 2014.

Regulators in both states say that now, the fate of the marketplaces depends very much on the actions of Congress and the Trump administration.

''We're just a little boat in this ocean,'' said Mr. Franchini, the New Mexico superintendent. ''If there's a tidal wave from Washington, it could scuttle us.''

URL: https://www.nytimes.com/2017/04/21/health/how-gop-in-2-states-coaxed-the-health-law-to-success-or-crisis.html

LOAD-DATE: April 23, 2017

LANGUAGE: ENGLISH

GRAPHIC: PHOTOS: David Moore of Bartlesville, Okla., who owns a fishing tackle business, is among many Oklahomans with strong reservations about the Affordable Care Act. ''You don't get on the Titanic when you know it's going to sink,'' he said of the health law. (BU1)
Top, Cameron Jarrett with his son, Henry, in Bartlesville, Okla. Of the Affordable Care Act he said, ''If we're going to do this, let's give it every opportunity to work.'' Above, John D. Doak, Oklahoma's insurance commissioner, said that without federal help, premium increases were inevitable. Below, Lori Roll, an insurance agent in Bartlesville, said she has had to tell clients: ''My God, your premium just doubled. I'm so sorry.'' (PHOTOGRAPHS BY SHANE BROWN FOR THE NEW YORK TIMES) (BU4)

PUBLICATION-TYPE: Newspaper

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October 20, 2014 Monday

Ohio Governor Backpedals on Repeal of Health Law

BYLINE: TRIP GABRIEL

SECTION: US; politics

LENGTH: 344 words

HIGHLIGHT: Gov. John Kasich of Ohio said his comments about a Republican-led Congress being unlikely to repeal the Affordable Care Act were taken out of context.

Wait, that's not what I really meant.

Gov. John Kasich of Ohio said his comments about a Republican-led Congress being unlikely to repeal the Affordable Care Act - which commentators on the right and left pounced upon Monday - were taken out of context.  

Mr. Kasich, a Republican mentioned as a 2016 presidential hopeful, in an interview distanced himself from the notion that he had accepted the health care law as a fait accompli. The idea is anathema to almost all Republican officials, and especially the party's base.

In an Associated Press article about nine Republican governors who have expanded Medicaid, Mr. Kasich, referring to repealing the Affordable Care Act, was quoted as saying "that's not gonna happen."

He insisted that his comment referred only to a repeal of the Medicaid expansion option, not the entire act. (Late Monday evening, The A.P. updated its report to include the governor's clarification.)

"I've always thought if we got a majority we would repeal Obamacare,'' he said. "My only point was they'd probably make an accommodation for Medicaid expansion.''

The governor was trying to control the damaging perception, not to say fatal for a would-be Republican presidential candidate, that he supports the Affordable Care Act.

Mr. Kasich pushed Medicaid expansion through Ohio's Republican-led Legislature over the opposition of Tea Party lawmakers, criticizing some conservatives for being hardhearted toward the poor and disabled. He had no regrets, he said. "This has had a very significant impact on people who have fundamentally really struggled and lived in the shadows,'' he said.

It is an open question how expanding Medicaid benefits as generously as the Affordable Care Act allows, to adults earning up to 138 percent of the poverty level, could be paid for without increased taxes and Medicare cost reductions also created by the health care law.

Mr. Kasich said he was working on his own replacement for Obamacare but did not offer specifics. "I'm in favor of repealing Obamacare," he repeated. "That's all I can tell you.''

LOAD-DATE: October 20, 2014

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June 28, 2012 Thursday

Supreme Court Rules on Health Care

BYLINE: DANIEL E. SLOTNIK

SECTION: EDUCATION

LENGTH: 246 words

HIGHLIGHT: The Supreme Court left standing the basic provisions of the Obama administration's health care overhaul that was passed by Congress.

WHAT major decision did the Supreme Court announce?
WHAT provisions of the Affordable Care Act did the court support? WHAT provisions did the justices reject?
WHAT groups favor the law?
WHAT groups are opposed to it?

WHEN did the court hear arguments about the law?
WHEN was the last decision of this magnitude?

WHERE did challenges to the law arise?

WHO created the law?
WHO has vowed to repeal it, if he is elected?
WHO ruled in favor of the law, despite his usual conservative political stance?

WHY has the Affordable Care Act created such contention?
WHY do many conservatives consider the mandate to buy insurance, a pillar of the law, an infringement of personal liberty?
WHY did Justice Antonin Scalia compare the mandate with buying broccoli?

HOW did the court rule the Affordable Care Act constitutional?
HOW could the law impact life in the United States, and the medical industry?

Related: the Supreme Court's ruling; related posts on the ruling'simpact on the election and the reaction on Capitol Hill; and our lessons "Before the Law: Understanding the Supreme Court Case on the Affordable Care Act" and "10 Ways to Study the U.S. Supreme Court With The New York Times."

LOAD-DATE: June 29, 2012

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The New York Times

December 8, 2016 Thursday 00:00 EST 

Cures Act Gains Bipartisan Support That Eluded Obama Health Law;
Congressional Memo

BYLINE: ROBERT PEAR

SECTION: US; politics

LENGTH: 1221 words

HIGHLIGHT: The 21st Century Cures Act, a bill that sailed through Congress with overwhelming support from both parties, stands in contrast to the looming fight over the Affordable Care Act.

WASHINGTON - With self-congratulatory zeal and smiles all around, huge bipartisan majorities in Congress have just passed legislation to speed the discovery of cures for killer diseases. At the same time, Republican leaders have been devising a strategy to undo the Affordable Care Act, which has done more than any law in a generation to treat people with those diseases.

"It is a real contradiction," said Dr. Otis W. Brawley, the chief medical officer at the American Cancer Society.

In recent years, few major bills have commanded as much support as the 21st Century Cures Act, which sailed to passage by votes of 392 to 26 in the House on Nov. 30, and 94 to 5 in the Senate a week later. Once it is signed by President Obama on Tuesday, as the White House has said it will be, the law will allow for money to be pumped into biomedical research and speed the approval of new drugs and medical devices. It also includes provisions to improve mental health care and combat opioid abuse. 

"This is the most significant legislation passed by this Congress," the Senate majority leader, Mitch McConnell of Kentucky, said on Thursday. By contrast, he once referred to the 2010 health law as "the single worst piece of legislation that has been passed in the last half-century."

Ellen V. Sigal, the chairwoman of Friends of Cancer Research, an advocacy group, said "there's a disconnect" between efforts to pass the Cures Act and to repeal the Affordable Care Act.

"Most people voting and lobbying on Capitol Hill have health insurance," Ms. Sigal said. "Intellectually, they may know that some people are suffering without insurance. But do they have empathy? Those who are insured may not emotionally understand what it is like for those who are not insured. We live in our own bubble."

Lawmakers have their own explanations.

For one thing, the two health care efforts vastly differ in size. At a cost of $6.3 billion, the Cures Act is not small, but the Affordable Care Act cost hundreds of billions of dollars and affected every facet of medicine - from insurance coverage to delivery of care. It was bound to be more difficult to enact.

The Republican authors of the Cures Act - Representative Fred Upton of Michigan and Senator Lamar Alexander of Tennessee - went to great lengths to work closely with Democrats, led by Representative Diana DeGette of Colorado and Senator Patty Murray of Washington. The cooperation paid off.

"We had bipartisan buy-in from Day 1," Ms. DeGette said.

By contrast, the Affordable Care Act was adopted in 2010 without a single Republican vote - either because, as Democrats have said, Republicans refused to cooperate; or, as Republicans have said, because it was jammed down their throats.

"We have been like the Hatfields and McCoys ever since, shooting each other," Mr. Alexander said.

Mr. Alexander, deeply frustrated by his dealings with the Obama White House in 2010, learned from that experience. "The next administration or the next Congress will not be repealing the Cures Act," he said, "because we have taken the time to work out our differences, and create a consensus of support."

The American Cancer Society supported both the Affordable Care Act and the current biomedical research bill, and sees the two efforts as intertwined.

"The Cures bill includes incredibly important reforms to get treatments to people faster," said Dr. Brawley, the top medical officer at the society. But he added, "We need to get those treatments to all people faster," and he emphasized the word "all."

The surge in spending on medical research will almost surely lead to new treatments, which could include some extraordinarily expensive drug therapies. To get such treatments, patients would need to have not just insurance, but good insurance coverage. (Some drug companies offer prescription assistance programs to help defray the costs.) A repeal of the Affordable Care Act could leave millions without access to the benefits of the biomedical research bill, Democrats have said.

Another factor in passage of the Cures Act was the relentless advocacy of Dr. Francis S. Collins, director of the National Institutes of Health, who helped lawmakers appreciate the possibility of a golden age of medicine - with an artificial pancreas for diabetics, a vaccine for AIDS and the use of stem cells to repair damaged heart tissue.

Representative Steve Cohen, Democrat of Tennessee, said: "My secretary of defense is Francis Collins, because the true enemy of each and every one of us isn't somebody in South Korea or somebody in Iran or ISIS. It's cancer, it's Alzheimer's, it's AIDS, it's diabetes, it's heart disease - all those dreadful, awful diseases that N.I.H. is looking for cures for."

Even as Congress wrapped up approval of the Cures Act this week, Republicans were having serious discussions about how to repeal and replace the Affordable Care Act without interrupting coverage for the newly insured. Republicans say they feel an obligation to move fast, because the law is crushing many families and small businesses with high costs.

Democrats say some Republicans want to repeal the president's signature legislative achievement just because it is called Obamacare. It would be "a poke in his eye politically," said Senator Tim Kaine, Democrat of Virginia, who warned that a repeal could be "catastrophic to tens of millions of Americans."

The Cures Act would also increase access to mental health care, which has been a bipartisan goal since the fatal shootings in 2012 of 20 children and six adults at Sandy Hook Elementary School in Newtown, Conn.

But Representative Frank Pallone Jr., Democrat of New Jersey, said the benefits of the mental health provisions "will be far outweighed by the catastrophic harm caused by individuals with mental illness if the Republicans move forward with their radical plans to repeal the Affordable Care Act."

Sponsors of the Cures Act toured the country, visited clinics, held hearings and listened to patients who recounted their struggles with cancer, Alzheimer's and dozens of other diseases. Patients and their well-organized advocacy groups proved to be more effective than the uninsured in lobbying Congress.

In debates on the Affordable Care Act, lawmakers have continually fought over the proper role of the federal government.

Republicans see the need for a federal role in conducting research and regulating drugs, but not in regulating the details of health insurance. Under the 2010 law, they have said, the Obama administration has issued so many regulations, bulletins, official policy statements and informal "guidance documents" that not even federal officials can keep track of them all.

Democrats have said the federal standards are needed to guarantee universal access to "essential health benefits," and to prevent insurers from discriminating against those who are sick.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

PHOTO: Members of the House and Senate on Thursday after signing the 21st Century Cures Act. (PHOTOGRAPH BY STEPHEN CROWLEY/THE NEW YORK TIMES)

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February 4, 2017 Saturday  
Late Edition - Final

Health Care Law Sign-Ups Dip Amid Uncertainty and Attacks by Trump

BYLINE: By ROBERT PEAR

SECTION: Section A; Column 0; National Desk; Pg. 9

LENGTH: 1012 words

WASHINGTON -- The number of people who signed up for health insurance in the federal marketplace that serves most states dipped this year to 9.2 million, the Trump administration said Friday, as consumers struggled with confusion over the future of the Affordable Care Act.

That represents a decline of more than 4 percent from the total of 9.63 million people who signed up through HealthCare.gov at this time last year.  

The numbers do not include activity in the 11 states that run their own online marketplaces under the Affordable Care Act, former President Barack Obama's signature health care law. State reports suggest that they have signed up about three million people.

Veterans of the Obama administration said President Trump's opposition to the health law and his efforts to undermine it had taken a toll. People may also have been influenced by signals from Congress that the law would soon be repealed. And some consumers may have been put off by the termination of their health plans, which was caused by an exodus of major insurers from the market in many states.

Just before leaving office, the Obama administration reported that sign-ups through HealthCare.gov were running slightly ahead of the number at the same time last year, with 8.8 million as of Jan. 14.

''Trump's sabotage worked,'' said Ben Wakana, who was a spokesman for Sylvia Mathews Burwell, the secretary of health and human services under Mr. Obama. ''We were on track to exceed last year's total. We expected a million people to sign up on the federal exchange in the final week of the open enrollment period.''

Still, the numbers present a challenge to Republicans who are struggling to repeal the law that allowed those millions to purchase insurance plans -- and who have promised not to displace anyone covered by it.

The fourth annual open enrollment season began Nov. 1 and ended Tuesday, 11 days after Mr. Trump took office.

The Trump administration scaled back publicity and advertising in the final days of the open enrollment period. Mr. Trump also issued a broadly worded executive order that directed federal officials to waive or delay any provision of the Affordable Care Act that would impose ''a cost, fee, tax, penalty or regulatory burden on individuals.''

The order, issued within hours of Mr. Trump's inauguration on Jan. 20, did not specify what actions would be taken. But lawyers and health policy experts read it as an indication that the government might not enforce the federal requirement for people to have health insurance or pay a tax penalty.

Mr. Trump has described the Affordable Care Act as ''a complete and total disaster'' and has said he wants to replace it with better, cheaper coverage ''for everybody,'' but he has not offered a plan to achieve that goal.

Senator Orrin G. Hatch, Republican of Utah and chairman of the Finance Committee, who is trying to draft a replacement for the law, said that ''today's numbers failed to keep pace with last year's.'' In addition, he suggested, some people who signed up will not pay their premiums and will therefore not have coverage this year.

''Either way,'' Mr. Hatch said, ''enrollment numbers are down, and costs are up.''

That response was predicted by Representative Nancy Pelosi of California, the House minority leader and an architect of the law.

''Now, Republicans will cynically point to the dip in enrollment they caused, declare the Affordable Care Act broken and move to steal the affordable health coverage of every American,'' she said. ''Meanwhile, in states committed to delivering affordable health coverage to their residents, enrollment in the Affordable Care Act's marketplaces has surged.''

''Democrats will continue to stand our ground to ensure that every American has access to affordable health coverage,'' she added.

Enrollment reports from the Obama administration were invariably upbeat, saying the numbers showed that people needed and wanted insurance under the Affordable Care Act.

The first report from the Trump administration struck a different tone.

''Obamacare has failed the American people, with one broken promise after another,'' Matt Lloyd, a spokesman for the Department of Health and Human Services, said Friday. ''Premiums in the A.C.A. marketplace have increased 25 percent while the number of insurers has declined 28 percent over the past year.''

Of the 9.2 million people who signed up through HealthCare.gov, one-third were new to the federal marketplace, and two-thirds were returning customers. The individual insurance market is in constant flux. With changes in income and employment, consumers may gain or lose coverage from Medicaid, employers and other sources of insurance.

The Obama administration predicted in October that 13.8 million people would sign up for coverage in the enrollment period that ended this week. The total appears likely to fall short of that goal.

Leslie Dach, a former Obama administration official who is trying to preserve the health law as a leader of the Protect Our Care Coalition, said, ''Enrollment was a success, and it would have been even higher without the Trump administration's efforts to suppress enrollment.'' Despite those efforts, he said, ''Americans continued to enroll in the final weeks, proving that there is considerable demand for quality and affordable coverage.''

Several states that run their own insurance exchanges appear to have done better than the federal marketplace. In New York, 908,200 people signed up through the state marketplace for either a qualified health plan or the ''basic health program'' authorized by the Affordable Care Act for low-income people. That represents an increase of 39 percent.

Under the Obama administration, enrollment in marketplace insurance plans was consistently lower than the levels originally projected by the Congressional Budget Office, in part because consumers were more likely to get and keep employer-sponsored insurance.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2017/02/03/us/politics/affordable-care-act-obama-care-sign-up.html

LOAD-DATE: February 4, 2017

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The New York Times Blogs
(Economix)

April 3, 2013 Wednesday

Small Companies and the Affordable Care Act

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 661 words

HIGHLIGHT: The Affordable Care Act may benefit medium-size companies by making it costly for their smaller competitors to expand, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

Small businesses have spoken out against the Affordable Care Act, but medium-size businesses, customers and taxpayers may be the ones ultimately harmed.

Beginning next year, the Affordable Care Act will penalize employers that fail to offer health insurance to their employees. Because small employers are especially unlikely to offer health insurance (see Table 3 in this paper from the Congressional Budget Office), and large businesses are likely to avoid the penalties because they already offer insurance, the penalties seem like an attack on small business. 

But the Affordable Care Act simultaneously rewards employees at small companies by heavily subsidizing their purchases of health insurance on the exchanges created by the law. Because employees cannot take the subsidies with them if they switch to a large company offering health insurance, the subsidies are, in effect, subsidies to the small businesses themselves, helping them compete more cheaply in the market for employees.

Employees at the smallest companies, with fewer than 50 employees, are eligible to receive the subsidies, even though their employers are exempt from the penalties.

Indeed, some medium-size businesses that currently offer health insurance say they find the smaller company "penalty plus subsidy" combination attractive and plan to drop their health insurance plans in order to partake in it, too, even though their participation will entail a penalty.

The Affordable Care Act also created tax credits for small business that are already available. These credits perhaps have too many strings attached to be attractive to employers, because only 770,000 employees (in an economy with more than 130 million) worked for employers claiming the credit in 2010 (see Page 9 of this report from the Government Accountability Office). The Affordable Care Act also promised to provide small-business employees a choice of health plans, but implementation of that plan has been pushed back until 2015.

Many small businesses are not as good with bureaucracy and red tape as large businesses are - that's one reason they did not offer health insurance in the first place. The employee subsidies coming online next year are pretty complicated, as evidenced by the 21-page application that must be completed by each employee, and the fact that any one year's subsidy has to be estimated based on historical employee data, advanced from the Internal Revenue Service to the insurer, and then later reconciled when the employee's family income for the year can be fully documented.

I suspect that large businesses will have human resource personnel dedicated to helping company employees complete the application and obtain and accurately reconcile the subsidy to which they are entitled. Employees at smaller business may have to fend for themselves.

We also have to remember that businesses compete for customers and for employees. A business that experiences a little direct harm from the act may benefit on the whole because competitors are harmed more. This is especially true because of the heavy penalty the law puts on businesses that expand from 49 to 50 employees: that one hire will cost the employer $40,000 annually in penalties, on top of that employee's usual salary and benefits.

Thus, the type of company that may benefit the most from the law is not necessarily large or small but a company with small competitors that have been looking for opportunities to expand their market share, and in the process bring the number of their employees to more than 49.

LOAD-DATE: April 4, 2013

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The New York Times

November 29, 2016 Tuesday 00:00 EST 

Tom Price, Health Dept. Nominee;
Letter

SECTION: OPINION

LENGTH: 225 words

HIGHLIGHT: A business professor rebuts Dr. Price's criticisms of the Affordable Care Act.

To the Editor:

Re "Fierce Critic of Health Care Law Said to Be Pick for Health Dept." (front page, Nov. 29): 

Representative Tom Price, an orthopedic surgeon from Georgia, is expected to be nominated as secretary of health and human services. You note that in the 2009 debate over the Affordable Care Act, Dr. Price called the federal government "stifling and oppressive."

It is true that the act does establish requirements for health insurers. Among other things, insurers cannot deny coverage to people with pre-existing conditions or charge them more than others, and they may not establish annual or lifetime limits.

While Dr. Price may consider those "stifling and oppressive," most Americans would choose the Affordable Care Act's protections over the conditions that existed before the law's passage.

Dr. Price's "most frequent objection to the law is that it interferes with the ability of patients and doctors to make medical decisions." Yet there is absolutely no evidence of that.

We may not agree on policy preferences, but if we could at least begin the policy discussion from a foundation of fact, that would be a small amount of progress.

STEPHEN M. DAVIDSON

Boston

The writer is a professor at the Questrom School of Business, Boston University, and the author of "A New Era in U.S. Health Care: Critical Next Steps Under the Affordable Care Act."

LOAD-DATE: November 30, 2016

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The New York Times Blogs
(FiveThirtyEight)

May 1, 2013 Wednesday

Uncertainty Still Clouds Health Care Law

BYLINE: MICAH COHEN

SECTION: US; politics

LENGTH: 455 words

HIGHLIGHT: As concerns arise about implementing the Affordable Care Act, even among its supporters, the White House has another worry: the law is still not well liked or well understood.

Three years after President Obama signed the health care reform law, there are concerns that the process of implementing it will be rocky. Even some of the law's supporters are worried. 

Perhaps more troubling for the White House, the Affordable Care Act is still not well liked or well understood. The Obama administration had hoped that over time, the legislation would gain enough support to help smooth over the rough patches of putting it into practice. Instead, public opinion has remained mostly static: a plurality of Americans still disapprove of the law, and a substantial portion of the public remains uncertain about what it says, according to recent polls.

There is even confusion about whether the health care law is still, in fact, law. A Kaiser Family Foundation survey [PDF] conducted in April found that 41 percent of American adults did not know that the Affordable Care Act remains the law of the land. A separate tracking survey conducted in April by Kaiser, which has done far more surveys on health care than any other polling organization, found that roughly half of American adults said they did not have enough information about the law to understand how it will affect them.

The tracking poll found that there had actually been an increase in the percentage of American adults with no opinion about the health care law.

Among those who do have an opinion, more people still regard the health care law negatively than positively, according to a series of recent polls. In fact, the law's net approval numbers stand basically where they did when it was passed.

One reason the Obama administration might still be optimistic is that while surveys have consistently found that a plurality of Americans have an overall negative view of the Affordable Care Act, they have just as consistently shown that large majorities of Americans favor individual elements of the law.

For example, Kaiser has found that about 70 percent of adults support providing financial assistance to low- and moderate-income Americans who do not have employer-provided health insurance, and also that about 70 percent support health insurance exchanges and the elimination of out-of-pocket costs for many preventive services - both elements of the health care law.

Once those benefits become realities, the percentage of Americans who approve of the law may rise. But if the law's rollout is messy, there may be a dip in approval before it has a chance to become more popular.

LOAD-DATE: May 1, 2013

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The New York Times Blogs
(The Learning Network)

June 26, 2015 Friday

6 Q's About the News | Supreme Court Allows Nationwide Health Care Subsidies

BYLINE: MICHAEL GONCHAR

SECTION: EDUCATION

LENGTH: 272 words

HIGHLIGHT: What rationale did Chief Justice Roberts give for the court’s decision?

Note: We're experimenting with a new format for this feature. Tell us what you think!

The June 25 article "Supreme Court Allows Nationwide Health Care Subsidies" begins:  

The Supreme Court ruled on Thursday that President Obama's health care law allows the government to provide nationwide tax subsidies to help poor and middle-class people buy health insurance, a sweeping vindication that endorsed the larger purpose of Mr. Obama's signature legislative achievement.

Read the entire article and answer the following questions. Support your responses using evidence from the text.

1. What is the Affordable Care Act?

2. What issue was the Supreme Court deciding this term related to the Affordable Care Act, and what did the court decide?

3. What rationale did Chief Justice Roberts give for the court's decision?

4. Why did Justice Antonin Scalia dissent?

5. How was this case different from the first case the Supreme Court decided in 2012 concerning the Affordable Care Act?

6. The Times Editorial Board writes, "The Supreme Court Saves Obamacare, Again." Do you believe the court made the right choice, in two separate decisions, to save the Affordable Care Act? Why?

Going Further

The Supreme Court has issued many more decisions in 2015 than in just King v. Burwell. Use the Times infographic "Major Supreme Court Cases in 2015" to choose one additional court decision from this term. Find out what the court decided and what was at stake. Then weigh in on whether you think the court made the right decision, and explain your reasoning.

Related
Teaching Resource | Ways to Study the U.S. Supreme Court With The New York Times

LOAD-DATE: June 29, 2015

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The New York Times Blogs
(You're the Boss)

July 20, 2011 Wednesday

Is Dividing a Company the Way to Beat the Affordable Care Act?

BYLINE: ROBB MANDELBAUM

SECTION: BUSINESS; smallbusiness

LENGTH: 988 words

HIGHLIGHT: There's a lot of interest, but it probably won't work, according to several tax and benefit lawyers.

That's one notion that seems to be circulating among small-business owners and their advisers lately. Consultants at McKinsey & Company floated the suggestion as part of their controversial report on employer views of health insurance. And in The Times's coverage of that report, Milt Freudenheim interviewed a small-business owner who said he was hoping to "game the system." The owner, Gerry Harkins, who is also chairman of the National Federation of Independent Business's Georgia State Leadership Council, said he might split his Atlanta-based construction company into two smaller companies to evade the overhaul's employer mandate, specifically the penalties on companies that fail to offer affordable health insurance to employees.

Unfortunately for Mr. Harkins (who did not return a call from The Agenda seeking an elaboration of his comments), the authors of the Affordable Care Act are one step ahead of him, according to several tax and benefit lawyers contacted by The Agenda. The authors included a provision that basically adopts parts of the Employee Retirement Income Security Act of 1974 that say any group of companies under common control are to be treated as a single company. Common control is defined as the same five or fewer people owning at least 80 percent of the companies, according to Al Martin, a tax lawyer at the Kansas City law firm Lathrop & Gage. Spouses and children are generally considered one owner, according to Mr. Martin.

No doubt this will make it difficult for people like Mr. Harkins to game the system. "You're going to wind up changing economic relationships if you avoid the rules," he said. "You've got to change ownership structure."

"The idea that that would be an easy thing to do would be hard for me to believe," added Jon Staudt, a tax lawyer with Belin McCormick in Des Moines. "People have been trying to avoid the E.R.I.S.A. law so that they could have separate pension plans, for example, pretty unsuccessfully for 36 years."

The McKinsey consultants, for their part, had other reasons for proposing a split. The thrust of their advice is to find ways to wean lower-wage employees off employer-sponsored coverage while keeping higher-wage employees, who won't be eligible for subsidies, insured.

Until the Affordable Care Act, federal law was a bit schizophrenic when it came to group health insurance plans for 50 or more people. A company that funded its own health insurance plan - a strategy that often makes financial sense for companies with several hundred participants - was subject to an antidiscrimination law that banned those plans from offering looser eligibility requirements or better benefits to top executives.

"The basic rule is you can do anything you want, but if the plan is self-funded, and if the effect of it is that the highly paid get the Cadillac deal and everybody else gets the Ford, that's not going to work," said Charles Wolfe, a lawyer at the Chicago law firm Vedder Price, and a co-chairman of an employee benefits committee of the American Bar Association. "The executives are going to get taxed."

There was a loophole, however: because group plans insured by a third party (like an insurance company) are regulated by the states, they weren't subject to federal discrimination laws. The solution for big companies, said Mr. Wolfe, was to self fund health insurance for the rank and file and buy a separate insured plan for the executives.

Now the Affordable Care Act is poised to close that loophole by applying the same antidiscrimination rules for self-funded plans to insured plans. (Because the regulations have not been written, the Internal Revenue Service is not yet enforcing this provision of the new law.) One option McKinsey proposes is to split the company into two separate entities, one with company managers and others who would get employer-sponsored insurance and the other for employees who would get no insurance. The company without insurance would have to pay the mandate penalty on those employees, and perhaps even additional compensation, but that could still be cheaper than buying their coverage.

Ah, but beware of free advice, which, as they say, is often worth what you pay for it. Here again, Congress linked the antidiscrimination law for self-funded plans to E.R.I.S.A.'s common-control provision. And the section of the Affordable Care Act that extends the discrimination ban to insured plans explicitly ties the new ban to those same common-control rules. McKinsey's suggestion "strikes me as a bit odd, in the sense that I don't think it will be possible for a company to keep its corporate or senior management in one company and the rest of its work force in another company and still provide tax-advantaged benefits to the senior management," said Philip Mowrey, one of Mr. Wolfe's partners at Vedder Price.

A McKinsey spokeswoman said the firm had no comment.

The penalty assessed under the Affordable Care Act, Mr. Mowrey also noted, was stiff: $100 a day multiplied by every employee discriminated against.

At least in theory, that is. According to Mr. Mowrey, the discrimination regulations for self-funded plans have never really been enforced, because they don't address very well the new types of health care plans that have been developed since the regulations were adopted in 1981. "It was sort of a moribund law," he said. With the expansion created by the Affordable Care Act, he says, it's clear that the I.R.S. is committed to implementing the bans for both kinds of insurance plans.

That means the only way a business owner will be able to beat the health care law by splitting a company into two will be by selling one, or most of one, of the resulting pieces.

LOAD-DATE: September 22, 2011

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The New York Times

December 9, 2016 Friday  
Late Edition - Final

Finding Rare Common Ground in Health Care's Future

BYLINE: By ROBERT PEAR

SECTION: Section A; Column 0; National Desk; CONGRESSIONAL MEMO; Pg. 21

LENGTH: 1173 words

WASHINGTON -- With self-congratulatory zeal and smiles all around, huge bipartisan majorities in Congress have just passed legislation to speed the discovery of cures for killer diseases. At the same time, Republican leaders have been devising a strategy to undo the Affordable Care Act, which has done more than any law in a generation to treat people with those diseases.

''It is a real contradiction,'' said Dr. Otis W. Brawley, the chief medical officer at the American Cancer Society.

In recent years, few major bills have commanded as much support as the 21st Century Cures Act, which sailed to passage by votes of 392 to 26 in the House on Nov. 30, and 94 to 5 in the Senate a week later. Once it is signed by President Obama on Tuesday, as the White House has said it will be, the law will allow for money to be pumped into biomedical research and speed the approval of new drugs and medical devices. It also includes provisions to improve mental health care and combat opioid abuse. 

''This is the most significant legislation passed by this Congress,'' the Senate majority leader, Mitch McConnell of Kentucky, said on Thursday. By contrast, he once referred to the 2010 health law as ''the single worst piece of legislation that has been passed in the last half-century.''

Ellen V. Sigal, the chairwoman of Friends of Cancer Research, an advocacy group, said ''there's a disconnect'' between efforts to pass the Cures Act and to repeal the Affordable Care Act.

''Most people voting and lobbying on Capitol Hill have health insurance,'' Ms. Sigal said. ''Intellectually, they may know that some people are suffering without insurance. But do they have empathy? Those who are insured may not emotionally understand what it is like for those who are not insured. We live in our own bubble.''

Lawmakers have their own explanations.

For one thing, the two health care efforts vastly differ in size. At a cost of $6.3 billion, the Cures Act is not small, but the Affordable Care Act cost hundreds of billions of dollars and affected every facet of medicine -- from insurance coverage to delivery of care. It was bound to be more difficult to enact.

The Republican authors of the Cures Act -- Representative Fred Upton of Michigan and Senator Lamar Alexander of Tennessee -- went to great lengths to work closely with Democrats, led by Representative Diana DeGette of Colorado and Senator Patty Murray of Washington. The cooperation paid off.

''We had bipartisan buy-in from Day 1,'' Ms. DeGette said.

By contrast, the Affordable Care Act was adopted in 2010 without a single Republican vote -- either because, as Democrats have said, Republicans refused to cooperate; or, as Republicans have said, because it was jammed down their throats.

''We have been like the Hatfields and McCoys ever since, shooting each other,'' Mr. Alexander said.

Mr. Alexander, deeply frustrated by his dealings with the Obama White House in 2010, learned from that experience. ''The next administration or the next Congress will not be repealing the Cures Act,'' he said, ''because we have taken the time to work out our differences, and create a consensus of support.''

The American Cancer Society supported both the Affordable Care Act and the current biomedical research bill, and sees the two efforts as intertwined.

''The Cures bill includes incredibly important reforms to get treatments to people faster,'' said Dr. Brawley, the top medical officer at the society. But he added, ''We need to get those treatments to all people faster,'' and he emphasized the word ''all.''

The surge in spending on medical research will almost surely lead to new treatments, which could include some extraordinarily expensive drug therapies. To get such treatments, patients would need to have not just insurance, but good insurance coverage. (Some drug companies offer prescription assistance programs to help defray the costs.) A repeal of the Affordable Care Act could leave millions without access to the benefits of the biomedical research bill, Democrats have said.

Another factor in passage of the Cures Act was the relentless advocacy of Dr. Francis S. Collins, director of the National Institutes of Health, who helped lawmakers appreciate the possibility of a golden age of medicine -- with an artificial pancreas for diabetics, a vaccine for AIDS and the use of stem cells to repair damaged heart tissue.

Representative Steve Cohen, Democrat of Tennessee, said: ''My secretary of defense is Francis Collins, because the true enemy of each and every one of us isn't somebody in South Korea or somebody in Iran or ISIS. It's cancer, it's Alzheimer's, it's AIDS, it's diabetes, it's heart disease -- all those dreadful, awful diseases that N.I.H. is looking for cures for.''

Even as Congress wrapped up approval of the Cures Act this week, Republicans were having serious discussions about how to repeal and replace the Affordable Care Act without interrupting coverage for the newly insured. Republicans say they feel an obligation to move fast, because the law is crushing many families and small businesses with high costs.

Democrats say some Republicans want to repeal the president's signature legislative achievement just because it is called Obamacare. It would be ''a poke in his eye politically,'' said Senator Tim Kaine, Democrat of Virginia, who warned that a repeal could be ''catastrophic to tens of millions of Americans.''

The Cures Act would also increase access to mental health care, which has been a bipartisan goal since the fatal shootings in 2012 of 20 children and six adults at Sandy Hook Elementary School in Newtown, Conn.

But Representative Frank Pallone Jr., Democrat of New Jersey, said the benefits of the mental health provisions ''will be far outweighed by the catastrophic harm caused by individuals with mental illness if the Republicans move forward with their radical plans to repeal the Affordable Care Act.''

Sponsors of the Cures Act toured the country, visited clinics, held hearings and listened to patients who recounted their struggles with cancer, Alzheimer's and dozens of other diseases. Patients and their well-organized advocacy groups proved to be more effective than the uninsured in lobbying Congress.

In debates on the Affordable Care Act, lawmakers have continually fought over the proper role of the federal government.

Republicans see the need for a federal role in conducting research and regulating drugs, but not in regulating the details of health insurance. Under the 2010 law, they have said, the Obama administration has issued so many regulations, bulletins, official policy statements and informal ''guidance documents'' that not even federal officials can keep track of them all.

Democrats have said the federal standards are needed to guarantee universal access to ''essential health benefits,'' and to prevent insurers from discriminating against those who are sick.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2016/12/08/us/politics/cures-act-health-care-congress.html

LOAD-DATE: December 9, 2016

LANGUAGE: ENGLISH

GRAPHIC: PHOTO: Members of the House and Senate on Thursday after signing the 21st Century Cures Act. (PHOTOGRAPH BY STEPHEN CROWLEY/THE NEW YORK TIMES)

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The New York Times Blogs
(Economix)

November 21, 2012 Wednesday

Employer-Provided Health Insurance and the Market

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 818 words

HIGHLIGHT: As the Affordable Care Act takes hold, some employers will use their health insurance coverage to attract workers, while others will drop the coverage and use higher pay as the lure, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

The future of employer-provided health insurance is better considered together with the future of total employee compensation, both cash and fringe benefits like health insurance. From that perspective, the likelihood that most employers will continue to offer health insurance is not necessarily good news for employees.

The Patient Protection and Affordable Care Act, President Obama's initiative, offers large health-insurance subsidies to the majority of the population beginning in 2014, but only if their employer does not offer affordable insurance. The subsidies are frequently much larger than the subsidies coming through the tax exclusion of employer-provided health insurance. 

Some economists are predicting that eligible employees, especially those in line for the largest subsidies, will prefer employers who do not offer affordable insurance. As a result, they say, many more employers will not offer insurance.

Others have different expectations, pointing out that employers dropping insurance will pay penalties and throw away the tax exclusion for their employees who are not subsidy-eligible (typically the ones who earn more). Moreover, perhaps because people are comfortable with their existing coverage even if it is not subsidized, employer coverage did not decline in Massachusetts when it began a similar plan (by my estimate, only 5 percent of the people in Massachusetts who could get subsidized individual-market insurance actually receive it, largely because they have coverage through the employer of the head of the household or that person's spouse). Note that Massachusetts has lower subsidies and a narrower eligible population than the Affordable Care Act and lower employer penalties for dropping coverage.

How many employers will drop their coverage when the new health care law gets under way? The answer makes for a nice headline, but that's the wrong question. Would it be so bad if many employers dropped their coverage but replaced it with huge cash raises? Or would it be so good if every employer continued to offer coverage but required employees to take big pay cuts?

All sides agree that some otherwise subsidy-eligible employees will work for employers that keep their coverage, and other subsidy-eligible employees will work for employers that drop it. Market forces must be considered, because some employees will be moving between these two types of employers.

Low-income employees will ultimately cost less to employers without coverage (or without "affordable" coverage; the important issue is that their low-income employees are subsidy-eligible) than they cost to employers with coverage. If they didn't, low-income employees would be better off at employers without coverage and would line up to work there. Meanwhile, the employers with coverage would find it more difficult to retain and attract low-income employees. That situation defies supply and demand.

Another way to see the same result: by getting low-income employees at lesser cost, employers without coverage can, without going out of business, compete aggressively for the high-income employees who are considering positions that offer coverage.

By the same logic, high-income employees will cost more to employers without coverage than they do to employers with coverage. Thus, high-income employees will lose one way or another -- either they will lose their tax exclusion because their employer eliminates coverage or they will see their cash compensation fall below what it would have been without the Affordable Care Act.

At the same time, the low-income employees will enjoy the subsidy either way: either their employer drops coverage, in which case they receive the subsidy directly, or their employer increases their compensation above what it would be without the Affordable Care Act to attract them from the employers without coverage. Tax economists will recognize this as the Harberger model applied to the Affordable Care Act; international economists will recognize it as the Heckscher-Ohlin model.)

The same sorts of market competition will ultimately prevent most employers from dropping their coverage and thereby incurring the penalties. Employers keeping coverage will raise the pay of subsidy-eligible employees and get by with fewer of them. Those who remain will typically not want to leave for no-coverage employers because doing so would cut their pay. The same employers will hire a few more high-income employees at lesser pay, because for those employees, the alternative is a no-coverage employer.

LOAD-DATE: November 21, 2012

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The New York Times

March 8, 2017 Wednesday  
Late Edition - Final

Law Took Months to Draft; Repeal May Be Much Swifter

BYLINE: By ROBERT PEAR

SECTION: Section A; Column 0; National Desk; Pg. 14

LENGTH: 909 words

WASHINGTON -- In June 2009, House Democratic leaders unveiled the first draft of legislation that would ultimately become the Affordable Care Act. A month later, three House committees began formally drafting the bill ahead of a House vote that came well into the fall, after the summer heat had dissipated and the leaves had begun to change.

On Wednesday, the House Ways and Means Committee and the Energy and Commerce Committee will formally mark up legislation to repeal and replace the act -- less than 48 hours after Republicans unveiled the bill to the public. If all goes according to plan, the House will vote within a few weeks, and the Senate will take up the legislation before its spring recess begins on April 7.  

Republicans excoriated Democrats for rushing passage of the Affordable Care Act -- President Barack Obama's landmark health law -- blasting ''back-room deals'' and cheering on the nascent Tea Party movement, with its hostile chant ''Read the bill, read the bill.'' But Republicans have adopted a much more aggressive timetable for repealing the law and remaking Medicaid, the health program for more than 70 million low-income people.

''The difference between 2009 and 2017 is like black and white,'' said former Senator Max Baucus of Montana, one of the chief architects of the Affordable Care Act, who spent countless hours in hearings and negotiations on the legislation as chairman of the Senate Finance Committee. ''It's a chasm. There's no comparison.''

On Monday evening, House Republicans unveiled their proposals to undo the law, signed by Mr. Obama in March 2010. The two House committees plan to start debating, amending and voting on the legislation on Wednesday. By week's end, they expect to finish this ritual, known as a markup.

Speaker Paul D. Ryan said the House would pass the repeal bill within a few weeks, and the Senate majority leader, Mitch McConnell, Republican of Kentucky, said that if the House kept to that timetable, the legislation ''will be on the agenda here in the Senate'' before the spring recess.

In comparison with the pace of work on the Affordable Care Act, that is lightning fast.

''We don't know how much it will cost, and we don't know if this bill will make health care more affordable for Americans,'' Senator Mike Lee, Republican of Utah, said on Tuesday. ''This is exactly the type of back-room dealing and rushed process that we criticized Democrats for.''

Representative Jim Jordan, a conservative Republican from Ohio who objects to major provisions of the bill devised by House Republican leaders, said, ''The American people don't want us to rush this thing.''

In June and July 2009, with Democrats in charge, the Senate health committee spent nearly 60 hours over 13 days marking up the bill that became the Affordable Care Act. That September and October, the Senate Finance Committee worked on the legislation for eight days -- its longest markup in two decades. It considered more than 130 amendments and held 79 roll-call votes.

The full Senate debated the health care bill for 25 straight days before passing it on Dec. 24, 2009.

''After years of howling at the moon about Democrats rushing through the Affordable Care Act,'' said Senator Chuck Schumer of New York, the Democratic leader, Republicans are now racing to pass the repeal bill because ''they don't want anyone to know what's in the bill.''

Democrats complained that the Republicans were rushing to approve a repeal bill without hearing from consumers, health care providers, insurance companies or state officials -- and without having estimates of the cost or the impact on coverage from the Congressional Budget Office.

Representative Greg Walden, Republican of Oregon and chairman of the Energy and Commerce Committee, denied that Republicans were cutting corners to speed approval of their repeal bill.

''In fact,'' he said on Tuesday, ''the bill went online live for the entire American people, all of you, all of us to read, all of our colleagues to read, at 6 o'clock last night. It's not that much to get through. It's pretty well understood.''

The Republicans' bill is indeed much shorter than the Affordable Care Act. With one paragraph of their bill, they can obliterate 10 or 20 pages of the law. One of their chief goals is to eliminate detailed federal standards, like those that define the permissible value of insurance plans -- bronze, silver, gold and platinum.

Another previous complaint by Republicans seems to apply now. For years, Republicans have reminded voters that the Affordable Care Act passed without any Republican votes. If they now repeal it, they are unlikely to have a single Democrat with them.

In 2009, Democratic senators negotiated with Republicans for months in hopes of finding common ground, but Republicans now do not expect any help from Democrats.

''We're not going to do this with Democrats,'' said Senator John Cornyn of Texas, the No. 2 Senate Republican.

In remarks prepared for the Ways and Means Committee meeting on Wednesday, Representative Sander M. Levin, Democrat of Michigan, said: ''Bad process makes for bad policy. And the process we are using today is not only bad; it's reckless. Almost no time to review the bill, no hearings on the bill, no C.B.O. estimate of the cost or coverage impact -- this is legislative malpractice.''

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2017/03/07/us/politics/obamacare-repeal-of-health-law-republicans.html

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The New York Times

February 25, 2017 Saturday  
Late Edition - Final

Ex-Kentucky Governor to Give Democrats' Reply to the President's Speech

BYLINE: By ALEXANDER BURNS

SECTION: Section A; Column 0; National Desk; Pg. 16

LENGTH: 699 words

WASHINGTON -- Former Gov. Steve Beshear of Kentucky, a senior Democrat best known for putting the Affordable Care Act into effect in a deeply conservative state, will give his party's response to President Trump's address to Congress on Tuesday, Democratic congressional leaders announced on Friday.

In selecting Mr. Beshear, 72, Democrats opted to elevate an elder statesman from the belt of heartland states that Mr. Trump won handily, rather than highlighting one of the party's newer faces or a potential challenger to Mr. Trump in 2020.  

In announcing the choice, Senator Chuck Schumer of New York, the Democratic leader, and Nancy Pelosi of California, the House minority leader, underscored Mr. Beshear's distinctive credentials as a spokesman on health care.

The party is in the middle of a major push to derail Republican efforts to repeal the Affordable Care Act, encouraging activists to swarm their members of Congress at town hall-style meetings and assailing Republican leaders for lacking a specific plan to replace the health care law.

Democratic governors gathering in Washington this weekend plan to call on Congress not to strip away health care funding from their states.

''Governor Beshear's work in Kentucky is proof positive that the Affordable Care Act works, reducing costs and expanding access for hundreds of thousands of Kentuckians,'' Mr. Schumer said in a statement.

Mr. Beshear, he added, ''knows exactly what is at risk if President Trump and congressional Republicans repeal the Affordable Care Act without a replacement.''

Ms. Pelosi described Kentucky under Mr. Beshear as ''one of the great success stories of the Affordable Care Act in delivering quality, affordable health coverage for all.''

Mr. Schumer and Ms. Pelosi also announced that Astrid Silva, an immigration activist, would give a response to Mr. Trump's address in Spanish.

Mr. Beshear, a relatively moderate Democrat who is the son of a preacher, indicated in a statement that he would also critique Mr. Trump's leadership style and discuss education and economic opportunity.

''Real leaders don't spread derision and division -- they build partnerships and offer solutions instead of ideology and blame,'' Mr. Beshear said.

But if Mr. Beshear can be expected to present an unthreatening message to voters in the political middle, it is his work on health care that has made him a national figure in the Democratic Party.

As governor, Mr. Beshear opened a state health care exchange, known as Kynect, and accepted federal money to expand Medicaid coverage in Kentucky. The number of Kentuckians without health insurance fell to 7.5 percent in 2015 from 20.4 percent in 2013, tied with Arkansas for the most dramatic plunge in the country.

Mr. Beshear has been a consistent voice of optimism about the Affordable Care Act among Democrats, and he predicted several years ago that the law would prove so popular, after being fully carried out, that it would more likely be expanded than repealed.

The law faces a far more uncertain prognosis, after Republicans won control of the White House and kept control of Congress in 2016 after campaigning on a pledge to unravel the Affordable Care Act.

Mr. Beshear's successor as governor, Matt Bevin, who is a Republican, won federal approval last fall for a plan to dismantle the Kynect exchange and move the state into the federal exchange.

But polls have shown the Affordable Care Act growing in popularity recently, during the debate over its possible demise, and Republicans in Congress are plainly struggling to make good on their vow to ''repeal and replace'' it.

Mr. Beshear's response to Mr. Trump's address will not be his first role in a presidential address to Congress. In 2014, he attended President Barack Obama's State of the Union speech as a guest of the president, who hailed his work on health care from the well of the House of Representatives.

''Kentucky's not the most liberal part of the country, but he's like a man possessed when it comes to covering his commonwealth's families,'' Mr. Obama said of Mr. Beshear.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2017/02/24/us/politics/steve-beshear-to-give-democratic-response-to-trump-address.html

LOAD-DATE: February 25, 2017

LANGUAGE: ENGLISH

GRAPHIC: PHOTO: Steve Beshear in 2015. (PHOTOGRAPH BY TIMOTHY D. EASLEY/ASSOCIATED PRESS)

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The New York Times

October 23, 2013 Wednesday  
Late Edition - Final

The Trouble at Health Care's Door

SECTION: Section A; Column 0; Editorial Desk; LETTERS; Pg. 28

LENGTH: 464 words

To the Editor:

President Obama is correct that the chaotic debut of the Affordable Care Act's online portal is intolerable (''Obama Admits Web Site Flaws on Health Law,'' front page, Oct. 22). 

The Affordable Care Act is complicated enough without handing the Republicans a gift-wrapped botched implementation procedure. President Obama and all those who work with him have very little time to get this debut straight. It's too promising a program to die of administrative incompetence!

THEODORE S. VOELKER New York, Oct. 22, 2013

To the Editor:

Re ''Contractors See Weeks of Work on Health Site'' (front page, Oct. 21):

The mind-numbing complexity of the online health insurance marketplace Web site -- 500 million lines of software code, or five times that of a large bank's computer system -- stands as a perfect metaphor for President Obama's health care law.

Had Congress simply extended Medicare to all Americans, we would have been spared the current difficulties. Instead, the Affordable Care Act turned into a Rube Goldberg-style construction in order to appease the for-profit health care industry and attract the votes of Republicans in Congress, who unanimously opposed the law anyway.

That Obamacare is now staggering under the weight of its self-imposed complexity is, in a sense, karmic justice.

FRANÇOIS FURSTENBERG Montreal, Oct. 22, 2013

To the Editor:

After spending 20-plus hours over three weeks attempting -- and failing -- to get health care coverage through the Affordable Care Act Web site, I believe that there may be a simpler solution.

As it is, to get a subsidy (tax credit) you must go through the exchange. An alternative is 1) allow direct purchase of A.C.A.-compliant policies from insurance carriers; 2) require carriers to issue a form at year end verifying the purchase and total of premiums paid; 3) submit this form and claim the subsidy (tax credit) on the individual federal tax return.

This would allow me to purchase insurance immediately, avoid the exchange and still get the benefits of the Affordable Care Act. While not a solution for everyone, it would be simple to implement and a big relief for self-employed, single parents like me who want nothing more than a clear pathway to obtain coverage.

CHARLES STANTON Jersey City, Oct. 21, 2013

To the Editor:

Suppose you go to an online bookseller and try to order the complete works of Shakespeare, only you can't because the vendor's Web site crashes. Do you then conclude that Shakespeare can't write?

We all know that would be ridiculous, so don't let people get away with the equivalent logical fallacy in the case of the Affordable Care Act. The Web site for enrollment is clearly a disaster, but that says nothing about the substance of the act itself.

JACKIE CLARE WOOD Menlo Park, Calif., Oct. 21, 2013

URL: http://www.nytimes.com/2013/10/23/opinion/the-trouble-at-health-cares-door.html

LOAD-DATE: October 23, 2013

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The New York Times

September 27, 2013 Friday  
Late Edition - Final

My State Needs Obamacare. Now.

BYLINE: By STEVE BESHEAR.

Steve Beshear, a Democrat, is the governor of Kentucky.

SECTION: Section A; Column 0; Editorial Desk; OP-ED CONTRIBUTOR; Pg. 23

LENGTH: 774 words

FRANKFORT, Ky. -- SUNDAY morning news programs identify Kentucky as the red state with two high-profile Republican senators who claim their rhetoric represents an electorate that gave President Obama only about a third of its presidential vote in 2012.

So why then is Kentucky -- more quickly than almost any other state -- moving to implement the Affordable Care Act? 

Because there's a huge disconnect between the rank partisanship of national politics and the outlook of governors whose job it is to help beleaguered families, strengthen work forces, attract companies and create a balanced budget.

It's no coincidence that numerous governors -- not just Democrats like me but also Republicans like Jan Brewer of Arizona, John Kasich of Ohio and Rick Snyder of Michigan -- see the Affordable Care Act not as a referendum on President Obama but as a tool for historic change.

That is especially true in Kentucky, a state where residents' collective health has long been horrendous. The state ranks among the worst, if not the worst, in almost every major health category, including smoking, cancer deaths, preventable hospitalizations, premature death, heart disease and diabetes.

We're making progress, but incremental improvements are not enough. We need big solutions with the potential for transformational change.

The Affordable Care Act is one of those solutions.

For the first time, we will make affordable health insurance available to every single citizen in the state. Right now, 640,000 people in Kentucky are uninsured. That's almost one in six Kentuckians.

Lack of health coverage puts their health and financial security at risk.

They roll the dice and pray they don't get sick. They choose between food and medicine. They ignore checkups that would catch serious conditions early. They put off doctor's appointments, hoping a condition turns out to be nothing. And they live knowing that bankruptcy is just one bad diagnosis away.

Furthermore, their children go long periods without checkups that focus on immunizations, preventive care and vision and hearing tests. If they have diabetes, asthma or infected gums, their conditions remain untreated and unchecked.

For Kentucky as a whole, the negative impact is similar but larger -- jacked-up costs, decreased worker productivity, lower quality of life, depressed school attendance and a poor image.

The Affordable Care Act will address these weaknesses.

Some 308,000 of Kentucky's uninsured -- mostly the working poor -- will be covered when we increase Medicaid eligibility guidelines to 138 percent of the federal poverty level.

PricewaterhouseCoopers and the Urban Studies Institute at the University of Louisville concluded that expanding Medicaid would inject $15.6 billion into Kentucky's economy over the next eight years, create almost 17,000 new jobs, have an $802.4 million positive budget impact (by transferring certain expenditures from the state to the federal government, among other things), protect hospitals from cuts in indigent care funding and shield businesses from up to $48 million in annual penalties.

In short, we couldn't afford not to do it.

The other 332,000 uninsured Kentuckians will be able to access affordable coverage -- most with a discount -- through the Health Benefit Exchange, the online insurance marketplace we named Kynect: Kentucky's Healthcare Connection.

Kentucky is the only Southern state both expanding Medicaid and operating a state-based exchange, and we remain on target to meet the Oct. 1 deadline to open Kynect with the support of a call center that is providing some 100 jobs. Having been the first state-based exchange to complete the readiness review with the United States Department of Health and Human Services, we hope to become the first one to be certified.

Frankly, we can't implement the Affordable Care Act fast enough.

As for naysayers, I'm offended by their partisan gamesmanship, as they continue to pour time, money and energy into overturning or defunding the Affordable Care Act. It's shameful that these critics haven't invested that same level of energy into trying to improve the health of our citizens.

They insist that the Affordable Care Act will never work -- when in fact a similar approach put into effect in Massachusetts by Mitt Romney, then the governor, is working.

So, to those more worried about political power than Kentucky's families, I say, ''Get over it.''

The Affordable Care Act was approved by Congress and sanctioned by the Supreme Court. It is the law of the land.

Get over it ... and get out of the way so I can help my people. Here in Kentucky, we cannot afford to waste another day or another life.

URL: http://www.nytimes.com/2013/09/27/opinion/my-state-needs-obamacare-now.html

LOAD-DATE: September 27, 2013

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The New York Times

March 14, 2017 Tuesday  
Late Edition - Final

Trump's Often Misleading Critiques of the Affordable Care Act

BYLINE: By LINDA QIU

SECTION: Section A; Column 0; National Desk; Pg. 12

LENGTH: 975 words

WASHINGTON -- President Trump blamed the news media on Monday morning for ''making Obamacare look so good'' as he spoke at a listening session with nine people he characterized as ''victims'' of the health care law.

Mr. Trump repeated his declaration that ''Obamacare is a disaster'' -- a sentiment echoed more specifically by White House and cabinet officials in the past few days.  

While it is undeniable that the law has not been universally beneficial, many of the criticisms from Mr. Trump and his team are cherry-picked or misleading.

Mr. Trump pointed to high premium increases.

''You represent the millions of American who have seen their Obamacare premiums increase by double digits and even triple digits.''

This needs context. In 2017, premiums for the benchmark plan increased by 22 percent on average across the states that use the federal marketplace or have their own exchanges, according to the Department of Health and Human Services. Some places had higher increases (116 percent in Arizona, the only state with a triple-digit increase) and some lower (9 percent in Wyoming).

That's much higher than the 7 percent increase in 2016 and 3 percent increase in 2015, but looking at premium increases alone does not fully capture what people are paying.

About 84 percent of enrollees qualify for tax credits that help blunt the costs in 2017, meaning the government picks up the tab for any increase. Factoring in this financial assistance, a 40-year-old nonsmoker making $30,000 would see no change, or even a slight reduction, for the benchmark plan in all but two states, the Kaiser Family Foundation estimated.

Mr. Trump criticized the law for having little impact on the number of insured.

''First of all, it covers very few people.''

False. About 20 million have gained insurance under the act. The uninsured rate fell to 10.9 percent at the end of last year, according to Gallup, compared with 17.1 percent at the end of 2013. Analysis from the Commonwealth Fund concluded that the Affordable Care Act was responsible for a majority of the decline.

Mr. Trump suggested millions are unsatisfied with the Affordable Care Act or lost health care because of it.

''Millions of people had great health care that they loved. Now when you start deducting those millions of people from the so-called people who are happy, you have a very small number of people that are happy.''

This is misleading. Researchers at the Urban Institute estimated that roughly 2.6 million people reported in 2013 that their plans were being canceled because of noncompliance with the A.C.A. But half of these people were eligible for Medicaid or subsidized insurance plans. A 2014 study from the RAND corporation, a nonprofit think tank, concluded that fewer than one million people, not ''millions,'' ended up with no insurance at all.

Most polls also contradict Mr. Trump's claim that there is a ''very small number of people that are happy.'' A majority of enrollees reported satisfaction with the health care law in three national surveys, though some expressed concern with lack of choice and affordability, according to a September 2016 Government Accountability Office review. (The outlier is Black Book Market Research, a public opinion research company based in Florida, which found just 22 percent of enrollees were satisfied.)

Tom Price, the secretary of health and human services, suggested the Affordable Care Act has forced workers to take on multiple jobs.

''You hear people's lives that have been affected in remarkably adverse ways that sometimes you don't think about as it relates to health care -- whether it's businesses that haven't been able to survive, or individuals who need to take three, four, five jobs.''

This is misleading. The Affordable Care Act mandated that businesses with more than 50 employees are required to offer health insurance to employees who work 30 hours or more per week, or pay a penalty. Though there are certainly some anecdotes of employers reducing hours to get around the mandate, studies have been unable to find much evidence of a widespread shift to part-time employment.

Mr. Price argued that Medicaid, not the Affordable Care Act, is the leading driver of more coverage.

''Well, in fact the number of individuals who actually got coverage through the exchange who didn't have coverage before, or who weren't eligible for Medicaid before is relatively small. So we've turned things upside down completely for three or four or five million individuals.''

This is misleading. Out of the 20 million people who have gained insurance under the law, about 14.5 million received coverage through Medicaid, 3.3 million of whom were previously eligible.

A majority of these Medicaid enrollments, 11.2 million, occurred because of the Affordable Care Act's expansion of the health care program. The health care law raised the eligibility cutoff to adults under 65 who made less than 138 percent of the poverty line.

Sean Spicer, the White House press secretary, claimed the Affordable Care Act has caused increases in private employer-based insurance as well.

''We went in to solve a problem that a small fraction of Americans had and we upended the entire system forcing premiums to go up and choice to go down for everybody.''

This is misleading. Health costs for employer-sponsored plans have risen in the years since the law was implemented. Independent estimates for the rate of increase hover in the 3 percent to 4 percent range.

But this trend was occurring in the years before the Affordable Care Act as well. The Kaiser Family Foundation estimates that premiums increased by 20 percent from 2011 to 2016, compared to 31 percent from 2006 to 2011 and 63 percent from 2001 to 2006.

Get politics and Washington news updates via Facebook, Twitter and in the Morning Briefing newsletter.

URL: http://www.nytimes.com/2017/03/13/us/politics/fact-check-trump-obamacare-health-care.html

LOAD-DATE: March 14, 2017

LANGUAGE: ENGLISH

GRAPHIC: PHOTO: President Trump on Monday during a meeting with Americans whom he described as ''victims'' of the Affordable Care Act. (PHOTOGRAPH BY STEPHEN CROWLEY/THE NEW YORK TIMES)

PUBLICATION-TYPE: Newspaper

Copyright 2017 The New York Times Company

 

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The New York Times Blogs
(Economix)

May 22, 2013 Wednesday

Massachusetts Employees Will Keep Their Health Plans

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 959 words

HIGHLIGHT: Because the state’s employees are relatively highly paid, the impact of Massachusetts’ health care reform is likely to be different than that of the Affordable Care Act, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

Massachusetts and a few neighboring states are likely to experience the Affordable Care Act a lot differently than the rest of America.

Massachusetts is often held up as a window into America's health insurance future, because it embarked on what came to be called the Romneycare reform six years ago. Like the Affordable Care Act provisions going into effect nationwide next year, Romneycare aimed to increase the fraction of the population with health insurance by imposing mandates on employers and employees and by subsidizing health insurance plans for middle-class families without employer plans. 

Because the subsidized plans are available for only low- and middle-income families whose employers do not offer affordable health benefits, some analysts fear employers around the nation will drop their health benefits as the Affordable Care Act goes into full effect, resulting in millions of people losing the opportunity to get health insurance through an employer.

But some people say they believe this fear is likely to be unfounded, because the propensity of Massachusetts employees to receive employer-sponsored health insurance was hardly different after Romneycare went into effect than it was in the years before.

The details and dollar amounts in the Massachusetts health care law differ from the national Affordable Care Act, and for that reason alone I hesitate to infer too much from the Massachusetts experience. Even if the two laws were essentially the same, the effects in Massachusetts could be different than the national effects because Massachusetts has a different population and business environment than the rest of the nation.

Last week I explained how specific types of employers could be expected to drop their health benefits during the next couple of years: those employers that currently offer benefits but nonetheless pay much of their payroll to people living in households below 300 percent of the federal poverty line, who are eligible for the most generous federal subsidies as soon as their employer ceases to offer benefits.

Massachusetts has an extraordinary fraction (almost two-thirds) of its population above 300 percent of the federal poverty line, and as a result practically all Massachusetts employers will prefer to retain their health benefits over the next few years, even though a significant fraction of employers elsewhere will not.

One way to quantify the difference between Massachusetts employers and employers elsewhere is in the percentage of payroll going to employees from families below 300 percent of the poverty line. At a national level, the percentage varies from 4 percent in Internet publishing to about 50 percent in restaurants and private household employers. The national average is 20 percent, compared with 13 percent in Massachusetts.

Employers have a variety of factors to consider in their benefit offering decisions, but I have made some estimates that focus on the payroll-composition statistics noted above. By my estimates, employers with percentages of 26 to 35 percent of employees above 300 percent of the poverty level have a sufficiently high percentage that they are likely to have been offering health insurance benefits before the Affordable Care Act. Yet they have a low enough percentage that their employees gain on average if the employer health benefit is dropped and employees take the subsidies available through the Affordable Care Act's health insurance exchanges.

About 10 percent of employees with health insurance live in a state and work in an industry with compensation percentages in the range where profits are to be gained by dropping employer health insurance. But none of them live in Massachusetts, and some states that border Massachusetts, including New Hampshire and Connecticut, are in a similar situation.

A number of states and industries - especially the industries I emphasized last week - have more than 35 percent of their payroll paid to people in families under 300 percent of the poverty line and are unlikely to be offering employee health benefits.

But those employers in Massachusetts who have 35 percent of their payroll paid to people in families under 300 percent of the poverty line are more likely to offer some kind of health benefit, in part because of Romneycare's incentives to create "cafeteria plans" in which employees authorize pretax salary to be withheld from their paychecks for the payment of health insurance premiums.

Under the federal law, the Massachusetts cafeteria plans will lose some of their advantages to employers in terms of avoiding penalties for failure to offer health benefits.

Based on the combination of these two factors - that no Massachusetts industries have 26 percent to 35 percent of their employees under 300 percent of the poverty line, and that Massachusetts employers will lose the advantages of their cafeteria plans - I calculate that employers offering health insurance in Massachusetts are one-third as likely to drop their employee health plans over the next couple of years as are employers in the rest of the nation.

That's because the percentage of the United States work force at risk of losing its employer insurance (because of the tendencies of their industry and states to have low- and middle income employees) is three times the percentage of the Massachusetts work force in the same situation.

LOAD-DATE: May 22, 2013

LANGUAGE: ENGLISH

DOCUMENT-TYPE: News

PUBLICATION-TYPE: Web Blog

Copyright 2013 The News York Times Company
All Rights Reserved

 

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The New York Times

January 14, 2017 Saturday  
Late Edition - Final

The Republicans vs. Obamacare

SECTION: Section A; Column 0; Editorial Desk; LETTERS; Pg. 18

LENGTH: 603 words

To the Editor:

Re ''The Fight for Health Care Has Begun'' (column, Jan. 10): David Leonhardt is correct about the Republicans' wish to crush the Affordable Care Act. But their likely strategy is one of neglect. They will shout ''repeal, repeal'' and cause such confusion that some insurance companies will drop out, premiums will rise and patients will be so uncertain about their options that they will not sign up.

The G.O.P. will then say ''see, it's a failure'' and offer unworkable travesties like high-risk pools. The Republicans can then move on with their real agenda to privatize Medicare and provide starvation block grants to unravel Medicaid. 

JAMES WEBSTER

Santa Fe, N.M.

The writer is professor emeritus of medicine at the Feinberg School of Medicine, Northwestern University.

To the Editor:

Re ''Trump Orders Swift Remake of Health Act'' (front page, Jan. 11):

Poor Donald! He apparently believed the Republican rhetoric that Obamacare failed. In publicly exhorting his party's congressional majority to repeal the Affordable Care Act and come up with a replacement at or near the same time, he doesn't realize that his party doesn't have and never did have a replacement, despite years of its repeated votes to repeal the law.

And the only effective replacement that won't explode the deficit would either be essentially the same as the Affordable Care Act or a single-payer insurance system. Sad!

SHARON MORRISON

Whitefish, Mont.

To the Editor:

The reason Republicans can't come up with a replacement for the Affordable Care Act is that it was their plan in the first place. It was devised at the conservative Heritage Foundation, enacted in Massachusetts by Gov. Mitt Romney, a Republican, and is essentially a market-based system to require people to buy private health insurance.

Privatization is the Republicans' solution to every problem (see also: education, infrastructure), and now that President Obama has tried it, they have nowhere else to turn. It is hard to understand how this simple truth has escaped attention in the public discourse.

ROBERT NEUGEBOREN

Cambridge, Mass.

To the Editor:

Re ''Health Lobby Quiet as Law Faces Repeal'' (front page, Jan. 10):

Why are the health care lobbyists and executives ''stunned'' at the speed with which the Republicans are trying to repeal the Affordable Care Act in Congress? Election Day should have been their wake-up call to expect and prepare for yet another bill to repeal Obamacare.

You report that the president of the Greater New York Hospital Association said health care executives ''don't want to get on the wrong side of the new administration or the Republican majority in Congress.'' These health care executives seem to cower rather than stand up for the millions who could lose health care coverage and watch as the health system is dismantled.

At this pivotal time, we need those in power to stand up for what is right and honorable especially for those in need.

JACQUELINE JONES

Portland, Ore.

To the Editor:

I doubt that companies ''were afraid to speak out'' merely because ''they feared that Mr. Trump would attack them on Twitter.'' Unlike Donald Trump, companies don't have fragile egos that can be damaged by a tweet. They might lose some customers, but probably not a decisive number.

More likely, the companies are afraid that Mr. Trump will mark them for revenge, and use presidential powers to exact it. They may also fear that business partners will shun a company at odds with Mr. Trump.

Such thinking is common in dictatorships. Is that where we're headed?

ILYA SHLYAKHTER

Cambridge, Mass.

URL: http://www.nytimes.com/2017/01/13/opinion/the-republicans-vs-obamacare.html

LOAD-DATE: January 14, 2017

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The New York Times

March 25, 2017 Saturday  
Late Edition - Final

The Republicans' Health Care Defeat

SECTION: Section A; Column 0; Editorial Desk; LETTERS; Pg. 20

LENGTH: 577 words

To the Editor:

The Republican-led House of Representatives just presented President Trump and Speaker Paul Ryan with a stunning political defeat by failing to support the bill to repeal the Affordable Care Act (nytimes.com, March 24).

Is this what Mr. Trump calls the ''Art of the Deal''? Perhaps his vaunted negotiating skills do not translate well into the political arena. In any event it was a totally self-inflicted wound. Why? 

First, it was a mistake to start his legislative agenda with health care ''reform.'' He should have started with tax and regulatory reform, much less contentious and much easier to pass.

Second, it was self-inflicted because the Republican Party leaders (at least Mr. Ryan) took their own campaign rhetoric too literally. They had been beating the drum for repeal and replace Obamacare for so long they actually believed it was what the people wanted (the majority do not).

They could have chosen to just repeal it now, with an effective repeal date in one year. Then they could have tried to work on a bipartisan bill with more real popular support and passed it next year.

Mr. Trump, right about now I'm guessing you really wish you had the absolute power of Vladimir Putin to effect change; you do not. There are real limits to your power, as we have just seen amply demonstrated.

KEN DEROW, SWARTHMORE, PA.

To the Editor:

Former President Barack Obama enjoys vindication as a colossal embarrassment has been sustained by President Trump and House Republicans, both forced to share blame for the collapse of their much-heralded American Health Care Act.

Mr. Trump exerted brute force in an effort to secure votes for the plan, and he got nowhere. Republican House members recognized that their primary allegiance is not to their president, but to the constituents before whom they will appear on the ballot next year. Conservatives found the bill to be too generous, while moderates concluded that it was cruel.

Changes should be made to the Affordable Care Act to make it sustainable. If the Republicans want to make those changes, they will have to eat crow, and work with Democrats who will insist on maintaining the framework of the Obama legislation.

Could this stunning defeat cause President Trump to finally demonstrate some humility?

OREN M. SPIEGLERUPPER ST. CLAIR, PA.

To the Editor:

After seven years of unrelenting contempt for President Obama and the Affordable Care Act, and with seven years to come up with an alternative, the Republicans, now that they have control of Congress and the White House, just showcased their incompetence.

The only surprise would be if, after this fiasco, they were willing to work with Democrats to actually improve the Affordable Care Act. I'm not holding my breath.

CHARLES MERRILL, NEW YORK

To the Editor:

Republicans have never liked the idea of a national health care system. President Obama's triumph in passing the Affordable Care Act infuriated them into an obsession to make it fail by any means necessary, lying about its successes and convincing their base that it was a terrible system.

Now the Republicans are facing a crisis of their own making, when a bipartisan effort could have made the Affordable Care Act work for everyone at reasonable costs.

Of course, it would be so much easier (and less expensive) to expand Medicare to cover all Americans -- but that would make Republicans' heads explode, so it's off the table.

CAROL ROBINSON, NEW YORK

URL: http://www.nytimes.com/2017/03/24/opinion/the-republicans-health-care-defeat.html

LOAD-DATE: March 25, 2017

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The New York Times

January 5, 2017 Thursday 00:00 EST 

The Health Care Plan Trump Voters Really Want;
Op-Ed Contributor

BYLINE: DREW ALTMAN

SECTION: OPINION

LENGTH: 974 words

HIGHLIGHT: The push to replace Obamacare does not reflect the desires of working-class voters. They want practical solutions to their health care problems.

This week Republicans in Congress began their effort to repeal and potentially replace the Affordable Care Act. But after listening to working-class supporters of Donald J. Trump - people who are enrolled in the very health care marketplaces created by the law - one comes away feeling that the Washington debate is sadly disconnected from the concerns of working people.

Those voters have been disappointed by Obamacare, but they could be even more disappointed by Republican alternatives to replace it. They have no strong ideological views about repealing and replacing the Affordable Care Act, or future directions for health policy. What they want are pragmatic solutions to their insurance problems. The very last thing they want is higher out-of-pocket costs. 

The Kaiser Foundation organized six focus groups in the Rust Belt areas - three with Trump voters who are enrolled in the Affordable Care Act marketplaces, and three with Trump voters receiving Medicaid. The sessions, with eight to 10 men and women each, were held in late December in Columbus, Ohio, Grand Rapids, Mich., and New Cumberland, Pa. Though the participants did not agree on everything, they expressed remarkably similar opinions on many health care questions. They were not, by and large, angry about their health care; they were simply afraid they will be unable to afford coverage for themselves and their families. They trusted Mr. Trump to do the right thing but were quick to say that they didn't really know what he would do, and were worried about what would come next.

They spoke anxiously about rising premiums, deductibles, copays and drug costs. They were especially upset by surprise bills for services they believed were covered. They said their coverage was hopelessly complex. Those with marketplace insurance - for which they were eligible for subsidies - saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it. They expressed animosity for drug and insurance companies, and sounded as much like Bernie Sanders supporters as Trump voters. One man in Pennsylvania with Type 1 diabetes reported making frequent trips to Eastern Europe to purchase insulin at one-tenth the cost he paid here.

Surveys show that most enrollees in the Affordable Care Act marketplaces are happy with their plans. The Trump voters in our focus groups were representative of people who had not fared as well. Several described their frustration with being forced to change plans annually to keep premiums down, losing their doctors in the process. But asked about policies found in several Republican plans to replace the Affordable Care Act - including a tax credit to help defray the cost of premiums, a tax-preferred savings account and a large deductible typical of catastrophic coverage - several of these Trump voters recoiled, calling such proposals "not insurance at all." One of those plans has been proposed by Representative Tom Price, Mr. Trump's nominee to be secretary of Health and Human Services. These voters said they did not understand health savings accounts and displayed skepticism about the concept.

When told Mr. Trump might embrace a plan that included these elements, and particularly very high deductibles, they expressed disbelief. They were also worried about what they called "chaos" if there was a gap between repealing and replacing Obamacare. But most did not think that, as one participant put it, "a smart businessman like Trump would let that happen." Some were uninsured before the Affordable Care Act and said they did not want to be uninsured again. Generally, the Trump voters on Medicaid were much more satisfied with their coverage.

There was one thing many said they liked about the pre-Affordable Care Act insurance market: their ability to buy lower-cost plans that fit their needs, even if it meant that less healthy people had to pay more. They were unmoved by the principle of risk-sharing, and trusted that Mr. Trump would find a way to protect people with pre-existing medical conditions without a mandate, which most viewed as "un-American."

If these Trump voters could write a health plan, it would, many said, focus on keeping their out-of-pocket costs low, control drug prices and improve access to cheaper drugs. It would also address consumer issues many had complained about loudly, including eliminating surprise medical bills for out-of-network care, assuring the adequacy of provider networks and making their insurance much more understandable.

Several states are addressing the problem of surprise medical bills. But other steps urged by these Trump voters will be harder to achieve, including controlling drug costs. Republican health reform plans would probably increase deductibles, not lower them. And providing the more generous subsidies for premiums and deductibles that these voters want would require higher taxes, something the Republican Congress seems disinclined to accept.

In general, the focus among congressional Republicans has been on repealing the Affordable Care Act. There has been little discussion of the priorities favored by the Trump voters who spoke to us. But once a Republican replacement plan becomes real, these working-class voters, frustrated with their current coverage, will want to know one thing: how that plan fixes their health insurance problems. And they will not be happy if they are asked to pay even more for their health care.

Follow The New York Times Opinion section on Facebook and Twitter (@NYTOpinion), and sign up for the Opinion Today newsletter.

Drew Altman is president and chief executive of the Henry J. Kaiser Family Foundation.

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December 31, 2016 Saturday 00:00 EST 

Job No. 1 for a New Congress? Undoing Obama's Health Law

BYLINE: ROBERT PEAR

SECTION: US; politics

LENGTH: 979 words

HIGHLIGHT: Republicans plan to waste no time repealing the Affordable Care Act, a signature part of President Obama's legacy.

WASHINGTON - Congress often waits for a new president to take office before it gets down to business. This year, Republicans will drop that custom in their dash to scrap the Affordable Care Act.

Within hours of the new Congress convening on Tuesday, the House plans to adopt a package of rules to clear the way for repealing the health care law and replacing it with as-yet-unspecified measures meant to help people obtain insurance coverage.

Then, in the week of Jan. 9, according to a likely timetable sketched out by Representative Greg Walden, Republican of Oregon, the House will vote on a budget blueprint, which is expected to call for the repeal of the Affordable Care Act. 

Later, in the week starting Jan. 30, said Mr. Walden, incoming chairman of the House Energy and Commerce Committee, the panel will act on legislation to carry out what is in the blueprint. That bill would be the vehicle for repealing major provisions of the health care law, including the expansion of Medicaid.

Republicans in both houses of Congress have said that repealing the health law is a top priority for the first months of 2017. "The Obamacare repeal resolution will be the first item up," said the Senate majority leader, Mitch McConnell, Republican of Kentucky.

President-elect Donald J. Trump has called the law an "absolute disaster," and has said he is eager to sign a repeal bill like one vetoed by President Obama in early 2016.

Representative Nancy Pelosi of California, the House Democratic leader, said the rules devised by House Republicans were "their opening salvo" against a law that she said had been "successful in meeting its goals of reducing cost, increasing access and improving quality of care."

In a last-ditch bid to save his signature legislative achievement, which has provided coverage to some 20 million Americans, Mr. Obama plans to visit a meeting of House and Senate Democrats on Wednesday to rally support for the law.

The Affordable Care Act, approved in 2010 without any Republican votes, provides tax credits to help people buy private insurance. It also allowed states to expand Medicaid eligibility, with the federal government paying most of the cost for new beneficiaries.

The law also saves hundreds of billions of dollars by reducing the growth of Medicare payments to hospitals, nursing homes, health maintenance organizations and other health care providers. Repealing the law would eliminate those savings and thus increase federal spending, the Congressional Budget Office says.

The proposed rules written by House Republicans allow lawmakers to raise a point of order against legislation that causes an increase in certain types of federal spending. But the rules give special protection to bills repealing or "reforming" the Affordable Care Act, even if such bills cause a temporary increase in spending.

Republicans worry that the Congressional Budget Office could count their plan for replacing the law as new spending, making it subject to challenge on the House floor. The exception being written into House rules would help them avoid that possibility.

Ms. Pelosi pointed to this provision as evidence that the health care law, as written, saves money. In their version of the rules, she said, "Republicans are admitting that repealing the Affordable Care Act will increase costs."

The Congressional Budget Office said in 2015 that "repealing the A.C.A. would raise federal deficits by $137 billion over the 2016-2025 period" - not only because the government would spend more on Medicare, for older Americans, but also because it would collect less in taxes from high-income households.

The 2010 law, the budget office noted, increased the payroll tax rate for many high-income taxpayers and imposed a surtax on their net investment income. The law also imposed annual fees on health insurers and manufacturers of brand-name drugs and medical devices.

Republicans may want to hold on to some of the tax revenue and Medicare savings, to help offset the cost of their plan to replace the Affordable Care Act. They have been trying to devise that replacement, but do not have a consensus and may hold hearings to examine the options.

If Congress votes to repeal the health care law early in 2017, Republican leaders say, they may delay the effective date for several years, to avoid disrupting coverage for people who have recently gained it.

The Republican rules package would also allow the House to continue its legal challenge to spending on insurance subsidies that reduce out-of-pocket costs for more than six million Americans.

In addition, the rules would require House committee chairmen to propose ways of imposing more fiscal discipline on federal entitlement programs. In the jargon of the federal budget, the goal is to switch some programs from "mandatory funding" to "discretionary appropriations," over which Congress has greater control.

This rule mirrors ideas advanced by Representative Tom Price, Republican of Georgia and chairman of the House Budget Committee, whom Mr. Trump has selected to be his secretary of health and human services.

"Two-thirds of current expenditures are dedicated to a relatively small number of automatic spending programs like Medicare, Medicaid and Social Security, which are not subject to annual appropriations and therefore operate largely outside the control of Congress," Mr. Price said in a recent speech.

PHOTO: Mitch McConnell, the Senate majority leader, has said that repealing the Affordable Care Act was the new Congress's top priority. (PHOTOGRAPH BY MARK WILSON/GETTY IMAGES) (A16)

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July 10, 2013 Wednesday

Taxing Employers and Employees

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 774 words

HIGHLIGHT: The Affordable Care Act will disrupt and distort labor markets in a variety of ways, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."

The delay of the Affordable Care Act's employer mandate is a favorable development for the labor market, but the employer mandate is only the tip of the iceberg in terms of the labor-market distortions that the law has scheduled to come on line next year.

The Affordable Care Act's employer mandate will eventually levy a penalty on large employers that do not offer affordable health insurance to their full-time employees. The penalty is based on the number of full-time employees and adds about $3,000 to the annual cost of employing each person. 

Employers have been complaining about the penalty, saying it will reduce the number of people they hire and cause them to reduce employee hours. Even economists and commentators supporting the law acknowledge that per-employee penalties reduce hiring by raising the cost of employment.

Economists have traditionally recognized that it hardly matters whether a tax is levied on employers or on employees, especially in the long run. In the employee-tax case, the employee pays the tax directly. In the employer-tax case, the employee pays the tax indirectly through reduced pay, because employer penalties reduce the willingness of employers to compete for people (Jonathan Gruber of the Massachusetts Institute of Technology has provided some good evidence in support of this widely accepted economic proposition).

Among other things, employment, employer costs and employee take-home pay would be essentially the same if the government levied a $3,000 fine on workers for having a full-time job with a large employer that does not offer health benefits, rather than levying the fine on employers on the basis of their full-time personnel, as the Affordable Care Act does.

But the political optics of the two policies are dramatically different. Large businesses can supposedly afford $3,000 per employee, while many employees could not afford another $3,000 bite out of their paychecks. Like it or not, economics' equivalence results tells us employees will have to afford what amounts to a tax on them beginning in 2015, pursuant to the Treasury Department's decision to begin collecting the employer penalty in that year.

For the purposes of understanding the state of the labor market, it doesn't really matter whether individuals would be paying a tax for having a full-time job or receiving a subsidy for not having a full-time job. Either policy would reduce the gap between the income of full-time employees and everybody else. The ultimate result will be less full-time employment, in an amount commensurate with the size of the tax or subsidy.

The Affordable Care Act offers subsidies for people without work or in part-time positions that far exceed $3,000 per employee per year, which makes the employer mandate only a small piece of the law's employment effects.

The law's other new work-disincentive provisions, still on schedule for next year, include (i) a sliding income scale that sets premiums for people who buy health insurance on the new marketplaces, (ii) a plan for premium assistance that essentially resurrects the Recovery Act's subsidy for what are known as Cobra benefits, allowing employees who have left a job to continue to participate, for a limited time, in their former employer's health plan, in a more comprehensive form and (iii) hardship relief from the individual mandate.

As an example of these provisions, I explained last week how, even without the employer penalties, the premium assistance plan sharply penalizes full-time employment in favor of part-time employment. In combination, the provisions going into effect next year are two or three times larger than the employer mandate by itself, depending on the type of worker and the industry of employment.

Proponents of the Affordable Care Act, including a number of economists, have yet to acknowledge that so many provisions of the act have, from a labor economics perspective, so much in common with the employer mandate. But labor-market distortions are a common feature of several significant parts of the act and are an important part of what has happened in our labor market.

Whatever labor market benefits accrue from delaying the employer mandate could be had many times over by delaying the entire Affordable Care Act.

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December 6, 2016 Tuesday 00:00 EST 

Addiction and the Health Law;
Letter

SECTION: OPINION

LENGTH: 228 words

HIGHLIGHT: The National Center on Addiction and Substance Abuse writes that repealing the Affordable Care Act will undermine efforts to reduce addiction.

To the Editor:

Re "The G.O.P. and Health Care Chaos" (editorial, "What's at Stake" series, Nov. 28): Repealing the Affordable Care Act will significantly undermine efforts to reduce addiction. 

First, the 22 million people at risk of losing their health insurance have higher rates of substance use disorders than the general population. Second, the law requires health plans to offer addiction benefits and prohibits plans from imposing more restrictive limits or higher out-of-pocket costs on those benefits as compared with similar medical/surgical benefits.

These provisions in the health law are the strongest protections available for health care consumers seeking addiction treatment paid for by their insurance.

Our country is divided on many issues, including the health law, but there is widespread agreement that addiction is a major problem.

The Affordable Care Act is not a perfect law, but it offers some of the best tools available for increasing addiction treatment access. Whatever proposal the new administration puts forward should include similar or better provisions to ensure that people with addiction can get treatment.

We cannot stop the opioid epidemic if people do not have health insurance that covers treatment.

LINDSEY VUOLO

New York

The writer is associate director of health law and policy at the National Center on Addiction and Substance Abuse.

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January 5, 2017 Thursday 00:00 EST 

The Health Care Law, Imperiled;
Letters

SECTION: OPINION

LENGTH: 566 words

HIGHLIGHT: Readers share views about the Republican dismantling of Obamacare.

To the Editor:

Re "Senate G.O.P. Opens Fight Over Obama Health Law" (front page, Jan. 5):

Given that the Republicans in Congress have offered nothing more than the lies of their own manufactured outrage to justify the haste and glee with which they are about to dismantle Obamacare, their actions can only be seen as a final act of political retribution against a president they never accepted or planned to work with in good faith.

The fact that more than 22 million people may lose access to health coverage as a result of this act of political callousness only cements the perception that the Republican Party is a morally and ethically bankrupt party that cannot be trusted to govern or participate responsibly in our democracy.  

MICHAEL SCOTT

San Francisco

To the Editor:

Re "Republicans' Four-Step Plan for Dismantling the Care Act" (front page, Jan. 5):

As a physician, I have seen firsthand the transformation of our health care system under the Affordable Care Act. The law is imperfect, as all laws are, but it has provided the necessary framework to control costs (and would be working even better if the incremental changes it needs had not been blocked by a hostile Congress for six years).

In its most important mission - bringing health insurance to all Americans, including those previously uninsurable because of pre-existing conditions - the law is a resounding success. I can state without equivocation that I have cared for patients who owe their lives to the Affordable Care Act, and that full repeal of this law will kill people.

NIKHIL SINGH

New Haven

The writer is a nephrology fellow at the Yale School of Medicine.

To the Editor:

President Obama's Affordable Care Act is not the culprit in the disaster that is the distribution of health care in America.

The most powerful Congressional lobby today is not the National Rifle Association or the military-industrial complex. It is the vast health-care-industrial complex, stretching across insurance, pharmaceutical and medical supply companies and down to hospitals and the American Medical Association, each feeling entitled to a share of the patient's wallet.

This is the capitalist ethic at its worst.

Republicans and libertarians cavalierly rail against entitlements and "people living off the public's dime" but remain silent on those profiting from people's misfortune and illness.

It will be interesting to see how Donald Trump's billionaire cabinet, secure and insured in its entitled wealth, will approach reforming Obamacare.

ROBERT PORATH

Boulder, Colo.

To the Editor:

Re "Safety-Net Hospitals Fear Cuts as Health Law's Repeal Looms" (front page, Dec. 28):

Simply put, hospitals that disproportionately serve Medicare and Medicaid patients (and thus very few commercially insured patients) are financially unsustainable because of severe underpayments.

In New York State alone, 27 hospitals are on a "watch list" for financial vulnerability, and many more are in similar fiscal distress. Repealing the Affordable Care Act without an immediate and adequate replacement will make things dramatically worse.

The health law is far from perfect, and long-term improvements are certainly necessary. But Washington would be wise to avoid decisions that will severely - and perhaps irreparably - harm America's safety-net hospitals and the vulnerable communities they serve.

KENNETH E. RASKE

President, Greater New York

Hospital Association

New York

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February 13, 2014 Thursday

Massachusetts Is Given Extension

SECTION: US

LENGTH: 576 words

HIGHLIGHT: The state, which had its own health insurance exchange before the Affordable Care Act, has been given another three months to manage a balky transition.

BOSTON - Massachusetts officials said Thursday that they have an additional three months to bring the state's health care system in line with the national Affordable Care Act.

The waiver, which was granted by federal officials on Wednesday, will allow the state to keep more than 100,000 individuals on state-run health insurance plans that do not comply with the requirements of the new law until June 30.

"We are determined to get this project back on track and get people out of this temporary coverage plan and transition to the program that they belong in," said Sarah Iselin, a health insurance executive who was appointed last week by Gov. Deval Patrick to oversee repairs to the state's troubled efforts to update its online health insurance exchange so it complies with the federal law. 

Massachusetts created its own online marketplace for health insurance when it passed a health care overhaul in 2006. That website functioned as intended until it was changed last fall to bring it up to date with the requirements of the Affordable Care Act. The site had problems determining whether many applicants were eligibile for the federal subsidies, and left tens of thousands of applications to be processed by hand.

Unable to immediately enroll applicants in new, private plans under the Affordable Care Act, state officials extended existing state coverage for about 110,000 individuals, and granted temporary state coverage to about 30,000 new applicants. Those individuals were supposed to move onto new plans by March. 31; the federal waiver gives officials another three months to do that.

"This is not a position we wanted to be in," said Ms. Iselin, who said there was a backlog of an additional 50,000 applications that had yet to be processed.

A health care technology firm, Optum, has been hired by the state to help process those applications and improve the functionality of the exchange website.

Last week, state officials released a report by an outside technology firm, Mitre Corporation, that criticized both the state and its principal contractor, CGI, for the failure of Massachusetts' new health exchange website. The report said that state organizations leading the website's overhaul lacked a "unified vision" for the project and that CGI lacked adequate expertise, managed the project poorly, lost data and failed to do enough testing before the launch of the new site.

The problems have been embarrassing to proponents of the federal health care overhaul who have pointed to Massachusetts as a successful implementation of a health exchange and an individual mandate.

Ms. Iselin said that part of the challenge here was that Massachusetts, which had the only state insurance marketplace before the Affordable Care Act was passed, was not simply extending coverage to new individuals but moving people from its old system to a new one.

"In some ways, it's made this part of implementing the A.C.A. more complex for us than other places that didn't have the same long history of these incremental expansions," she said.

The state originally asked for a six-month extension. Ms Iselin said it was "too soon too tell" whether they would need more than the three months they got.

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February 10, 2015 Tuesday

No 'Manly Firmness' in Denying Health Care, McCaskill Says

BYLINE: ALAN RAPPEPORT

SECTION: US; politics

LENGTH: 201 words

HIGHLIGHT: Is repealing the Affordable Care Act an issue of manhood?

Is repealing the Affordable Care Act an issue of manhood?

A state representative in Missouri suggested as much in a resolution asking members of the state's congressional delegation to undo the law.  

The bill, introduced by State Representative Mike Moon, a Republican, insists that "each member of the Missouri congressional delegation endeavor with 'manly firmness' and resolve to totally and completely repeal the Affordable Care Act, settling for no less than a full repeal."

The macho language raised the eyebrows of Senator Claire McCaskill, a Missouri Democrat who has been a defender of the law.

"I don't think you prove your manhood by kicking folks off their health coverage and once again letting insurance companies discriminate against women and sick people," Ms. McCaskill said in a statement.

Mr. Moon told The Columbia Daily Tribune that he did not mean to offend women with the language in his bill. The phrase, he said, was a reference to a line about fighting for freedom that was written in the Declaration of Independence.

"It is just like going to war," Mr. Moon told the paper. "You want a soldier to fight like a man. If a woman is in the trenches, you want them to fight like a man, too."

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December 29, 2014 Monday

Obama Says Health Law Is Helping White Americans, Despite Perceptions

BYLINE: MICHAEL S. SCHMIDT

SECTION: US; politics

LENGTH: 375 words

HIGHLIGHT: In an interview scheduled to air Monday on NPR, President Obama said that despite the perception the Affordable Care Act is for blacks and Latinos, it is helping many whites.

HONOLULU - President Obama said that despite the perception that the Affordable Care Act is for blacks and Latinos, it is helping many whites.

"The truth of the matter is that a state like Kentucky that doesn't have a massive black or Hispanic population has been one of the strongest states," Mr. Obama said in a wide-ranging interview scheduled to be broadcast on NPR on Monday. 

The president said that Kentucky - represented by the incoming majority leader, Senator Mitch McConnell - was "one of the best states in using the Affordable Care Act to insure huge number of working-class white voters."

But, he said, "they don't call it Obamacare; they call it something else."

Despite recent turmoil in Ferguson, Mo., and in New York City over relations between minorities and the police, the president said he believed that the United States was less racially divided than before he took office.

"I mean, the issue of police and communities of color being mistrustful of each other is hardly new: That dates back a long time," he said. "It's just something that hasn't been talked about - and for a variety of reasons."

Mr. Obama said it made sense that polls pointed to deteriorating race relations "because when it's in the news and you see something like Ferguson or the Garner case in New York, then it attracts attention."

"But I assure you, from the perspective of African-Americans or Latinos in poor communities who have been dealing with this all their lives, they wouldn't suggest somehow that it's worse now than it was 10, 15 or 20 years ago."

In regard to international relations, Mr. Obama said that his "strategic patience" had gotten lost in the 24-hour news cycle.

"You'll recall that three or four months ago, everybody in Washington was convinced that President Putin was a genius," he said.

He added: "I said at the time we don't want war with Russia, but we can apply steady pressure working with our European partners, being the backbone of an international coalition to oppose Russia's violation of another country's sovereignty, and that over time, this would be a strategic mistake by Russia."

"And today, you know, I'd - I'd sense that at least outside of Russia," he said, "maybe some people are thinking what Putin did wasn't so smart."

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March 7, 2017 Tuesday  
Late Edition - Final

G.O.P. Health Bill Trades Mandate for Tax Credits

BYLINE: By ROBERT PEAR and THOMAS KAPLAN

SECTION: Section A; Column 0; National Desk; Pg. 1

LENGTH: 1498 words

WASHINGTON -- House Republicans unveiled on Monday their long-awaited plan to repeal and replace the Affordable Care Act, scrapping the mandate for most Americans to have health insurance in favor of a new system of tax credits to induce people to buy insurance on the open market.

The bill sets the stage for a bitter debate over the possible dismantling of the most significant health care law in a half-century. In its place would be a health law that would be far more oriented to the free market and would make far-reaching changes to a vast part of the American economy.

The House Republican bill would roll back the expansion of Medicaid that has provided coverage to more than 10 million people in 31 states, reducing federal payments for many new beneficiaries. It also would effectively scrap the unpopular requirement that people have insurance and eliminate tax penalties for those who go without. The requirement for larger employers to offer coverage to their full-time employees would also be eliminated. 

People who let their insurance coverage lapse, however, would face a significant penalty. Insurers could increase their premiums by 30 percent, and in that sense, Republicans would replace a penalty for not having insurance with a new penalty for allowing insurance to lapse.

House Republican leaders said they would keep three popular provisions in the Affordable Care Act: the prohibition on denying coverage to people with pre-existing conditions, the ban on lifetime coverage caps and the rule allowing young people to remain on their parents' health plans until age 26.

Republicans hope to undo other major parts of President Barack Obama's signature domestic achievement, including income-based tax credits that help millions of Americans buy insurance, taxes on people with high incomes and the penalty for people who do not have health coverage.

Medicaid recipients' open-ended entitlement to health care would be replaced by a per-person allotment to the states. And people with pre-existing medical conditions would face new uncertainties in a more deregulated insurance market.

The bill would also cut off federal funds to Planned Parenthood clinics through Medicaid and other government programs for one year.

''Obamacare is a sinking ship, and the legislation introduced today will rescue people from the mistakes of the past,'' said Representative Kevin McCarthy of California, the majority leader.

Democrats denounced the effort as a cruel attempt to strip Americans of their health care.

''Republicans will force tens of millions of families to pay more for worse coverage -- and push millions of Americans off of health coverage entirely,'' said Representative Nancy Pelosi of California, the Democratic leader.

Two House committees -- Ways and Means and Energy and Commerce -- plan to take up the legislation on Wednesday. House Republicans hope the committees will approve the measure this week, clearing the way for the full House to act on it before a spring break scheduled to begin on April 7. The outlook in the Senate is less clear. Democrats want to preserve the Affordable Care Act, and a handful of Republican senators expressed serious concerns about the House plan as it was being developed.

Under the House Republican plan, the income-based tax credits provided under the Affordable Care Act would be replaced with credits that would rise with age as older people generally require more health care. In a late change, the plan reduces the tax credits for individuals with annual incomes over $75,000 and married couples with incomes over $150,000.

Republicans did not offer any estimate of how much their plan would cost, or how many people would gain or lose insurance. The two House committees plan to vote on the legislation without having estimates of its cost from the Congressional Budget Office, the official scorekeeper on Capitol Hill.

But they did get the support from President Trump that they badly need to win House passage.

''Obamacare has proven to be a disaster with fewer options, inferior care and skyrocketing costs that are crushing small business and families across America,'' said the White House press secretary, Sean Spicer. ''Today marks an important step toward restoring health care choices and affordability back to the American people.''

The release of the legislation is a step toward fulfilling a campaign pledge -- repeal and replace -- that has animated Republicans since the Affordable Care Act passed in 2010. But it is far from certain Republican lawmakers will be able to get on the same page and repeal the health measure.

On Monday, four Republican senators -- Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska -- signed a letter saying a House draft that they had reviewed did not adequately protect people in states like theirs that have expanded Medicaid under the Affordable Care Act.

Three conservative Republicans in the Senate -- Mike Lee of Utah, Rand Paul of Kentucky and Ted Cruz of Texas -- had already expressed reservations about the House's approach.

In the House, Republican leaders will have to contend with conservative members who have already been vocal about their misgivings about the legislation being drawn up. ''Obamacare 2.0,'' Representative Justin Amash, Republican of Michigan, posted on Twitter on Monday.

Representative Mark Meadows, Republican of North Carolina and the chairman of the conservative House Freedom Caucus, also offered a warning on Monday, joining with Mr. Paul to urge that Republican leaders pursue a ''clean repeal'' of the health care law.

''Conservatives don't want new taxes, new entitlements and an 'ObamaCare Lite' bill,'' they wrote on the website of Fox News. ''If leadership insists on replacing ObamaCare with ObamaCare-lite, no repeal will pass.''

The move to strip Planned Parenthood of funding and the plan's provisions to reverse tax increases on the high-income taxpayers will also expose Republicans in more moderate districts to Democratic attacks.

The bill would provide each state with a fixed allotment of federal money for each person on Medicaid, the federal-state program for more than 70 million low-income people. The federal government would pay different amounts for different categories of beneficiaries, including children, older Americans and people with disabilities.

The bill would also repeal subsidies that the government provides under the Affordable Care Act to help low-income people pay deductibles and other out-of-pocket costs for insurance purchased through the public marketplaces. Eliminating these subsidies would cause turmoil in insurance markets, insurers and consumer advocates say.

However, the House Republicans would provide states with $100 billion over nine years, which states could use to help people pay for health care and insurance.

The tax credits proposed by House Republicans would start at $2,000 a year for a person under 30 and would rise to a maximum of $4,000 for a person 60 or older. A family could receive up to $14,000 in credits.

Even with those credits, Democrats say, many people would find insurance unaffordable. But Republicans would allow insurers to sell a leaner, less expensive package of benefits and would allow people to use the tax credits for insurance policies covering only catastrophic costs.

While Republicans have argued over how to proceed, Mr. Trump has expressed only vague goals for how to repeal the Affordable Care Act and improve the nation's health care system. On Capitol Hill, lawmakers and their aides are waiting to see whether he uses his platform, Twitter account and all, to press reluctant Republicans to get behind the House plan.

The new version of the House Republican bill makes several changes to earlier drafts of the legislation.

It drops a proposal to require employees with high-cost employer-sponsored health insurance to pay income and payroll taxes on some of the value of that coverage. In addition, it would delay a provision of the Affordable Care Act that imposed an excise tax on high-cost insurance plans provided by employers to workers.

Congress had already delayed this ''Cadillac tax'' -- despised by employers and labor unions alike -- by two years, to 2020. The new legislation would suspend the tax from 2020 through 2024.

House Republicans would offer tax credits to help people buy insurance if they did not have coverage available from an employer or a government program. Under earlier versions of the bill, the tax credits increased with a person's age, but would not have been tied to income. Backbench Republicans said the government should not be providing financial assistance to people with high incomes.

Accordingly, under the new version of the bill, the tax credits would be reduced and eventually phased out.

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URL: http://www.nytimes.com/2017/03/06/us/politics/affordable-care-act-obamacare-health.html

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GRAPHIC: PHOTO: Speaker Paul D. Ryan last week in Washington. House Republicans have unveiled their plan to replace the Affordable Care Act. (PHOTOGRAPH BY DOUG MILLS/THE NEW YORK TIMES) (A13)

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The New York Times Blogs
(Economix)

January 30, 2013 Wednesday

The Health-Care Law and Retirement Savings

BYLINE: CASEY B. MULLIGAN

SECTION: BUSINESS; economy

LENGTH: 568 words

HIGHLIGHT: The way in which pension contributions are treated for tax purposes could affect eligibility for premium assistance under the Affordable Care Act, an economist writes.

Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of "The Redistribution Recession: How Labor Market Distortions Contracted the Economy."  

Because of its definition of affordability, beginning next year the Affordable Care Act may affect retirement savings.

Employer contributions to employee pension plans are exempt from payroll and personal income taxes at the time that they are made, because the employer contributions are not officially considered part of the employee's wages or salary (employer health insurance contributions are treated much the same way). The contributions are taxed when withdrawn (typically when the worker has retired), at a rate determined by the retiree's personal income tax situation.

Employees are sometimes advised to save for retirement in this way in part because the interest, dividends and capital gains accrue without repeated taxation. In addition, people sometimes expect their tax brackets to be lower when retired than they are when they are working.

These well-understood tax benefits of pension plans will change a year from now if the act is implemented as planned. Under the act, wages and salaries of people receiving health insurance in the law's new "insurance exchanges" will be subject to an additional implicit tax, because wages and salaries will determine how much a person has to pay for health insurance.

While much about the Affordable Care Act is still being digested by economists, they have long recognized that high marginal tax rates lead to fringe benefit creation. And the Congressional Budget Office has concluded that the act will raise marginal tax rates.

Were an employer to reduce wages and salaries (or fail to increase them) and compensate employees by introducing an employer-matching pension plan, the employee is likely to benefit by receiving additional government assistance with his health-insurance costs. The pension contributions will add to the worker's income during retirement, except that the income of elderly people does not determine health-insurance eligibility to the same degree, because the elderly participate in Medicare, most of which is not means-tested.

Take, for example, a person whose four-member household would earn $95,000 a year if his employer were not making contributions to a pension plan or did not offer one. He would be ineligible for any premium assistance under the Affordable Care Act because his family income would be considered to be about 400 percent of the poverty line.

If instead the employer made a $4,000 contribution to a pension plan and reduced the employee's salary so that household income was $91,000, the employee would save the personal income and payroll tax on the $4,000 and would become eligible for about $2,600 worth of health-insurance premium assistance under the act. (The employer would come out ahead here, too, by reducing its payroll tax obligations).

Even though the Affordable Care Act is known as a health-insurance law, in effect it could be paying for a large portion of employer contributions to pension plans. This has the potential of changing retirement savings and the relative living standards of older and working-age people.

LOAD-DATE: January 30, 2013

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The New York Times

February 13, 2016 Saturday  
Late Edition - Final

Medicare Sign-Up Surge Confounds Expectations That Plans Would Falter

BYLINE: By ROBERT PEAR

SECTION: Section A; Column 0; National Desk; Pg. 11

LENGTH: 1422 words

WASHINGTON -- Five years into Medicare spending cuts that were supposed to devastate private Medicare options for older Americans, enrollment in private insurance plans through Medicare has shot up by more than 50 percent, confounding experts and partisans alike and providing possible lessons for the Affordable Care Act's insurance exchanges.

When Congress passed President Obama's signature health law nearly six years ago, it helped offset the cost by cutting payments to Medicare Advantage plans, offered by private insurers operating under contract with the government. Insurers and Republicans said the cuts -- about $150 billion over 10 years -- would ''gut'' the program, a major theme in the 2010 and 2012 elections. The Congressional Budget Office predicted that enrollment would fall about 30 percent.

In fact, more than 17 million people are now enrolled in such plans, up from under 11 million in 2010. Nearly one-third of Medicare beneficiaries have chosen private plans, offered by insurers like Humana and UnitedHealth Group, over the traditional fee-for-service Medicare program. 

But some of the same insurers avidly seeking Medicare Advantage sign-ups have been apprehensive about enrolling people under 65 in public marketplaces created by the Affordable Care Act. It has taken herculean efforts by the Obama administration and by insurance counselors to sign up 12.7 million people -- far below the enrollment of 21 million in 2016 originally projected by the budget office.

The different trajectories of the two programs are explained by many factors, including money, market size and politics. Insurers know the Medicare population, know the rules of the program and have found ways to manage care that improve the health of Medicare patients and the financial health of the companies. They know much less about their new marketplace customers, many of whom were previously uninsured, and Congress, still bitterly divided over the health law, has done little to stabilize it.

''The size of the Medicare market is much larger,'' said Ana Gupte, a health care analyst at Leerink Partners in New York. ''The growth in the market is larger. Revenue per member is significantly higher, and the profitability is higher. So it's just better on all dimensions.''

For Medicare patients, the government pays insurers, on average, $10,000 a year per person -- a total of more than $170 billion -- and insurance executives say that well-run Medicare Advantage plans can often count on profit margins of 4 percent to 5 percent, even with the health law's spending reductions.

By contrast, securities analysts say, insurers typically receive an average of $3,000 to $5,000 a year in revenue for a person under 65 who signs up through the new marketplaces, and many insurers struggle to make a profit. Many insurers say they lost money on this program in 2014 and 2015, in part because they underestimated how much care their new customers would use.

Some insurers are so worried about losses on their exchange business that they have curtailed the active marketing of such plans. Kenneth J. Statz, an individual insurance specialist based near Cleveland, said major insurers were reducing or eliminating the commissions they paid to agents and brokers for enrolling people in marketplace plans, while continuing to pay for enrollment in Medicare plans.

''Even with all the cutbacks in the Affordable Care Act, there is still a decent opportunity for insurance companies to make a profit in the Medicare Advantage program,'' said Richard S. Foster, the former chief actuary of the Medicare program. ''The marketplace under the Affordable Care Act will calm down over time but may not ever be as stable and predictable as Medicare Advantage.''

The health care company Aetna said this month that its individual health insurance offerings under the Affordable Care Act ''remained unprofitable in 2015.'' Aetna's chief executive, Mark T. Bertolini, said the company had ''serious concerns about the sustainability of the public exchanges.''

But the company is bullish on Medicare. It announced last year that it would acquire Humana, another large insurer, pending antitrust review -- in part because Humana has more than three million people enrolled in Medicare Advantage plans.

Insurers say they have done everything possible to shield older Americans from the cuts in Medicare Advantage enacted in 2010. Private plans offer financial protection to Medicare beneficiaries, through a yearly limit on out-of-pocket costs, and often provide extra benefits not included in traditional Medicare.

''Seniors are increasingly choosing Medicare Advantage because they recognize the tremendous value of this program in their daily lives,'' said Marilyn B. Tavenner, the chief executive of America's Health Insurance Plans, a trade group, who used to run the federal Medicare program.

Many people under 65 have gained coverage because of the Affordable Care Act. But insurance markets in some states have been full of surprises for consumers and insurers alike, with volatile prices, nonprofit insurance cooperatives collapsing and enrollment in flux.

''In the Affordable Care Act marketplace, there has been an enormous amount of churning -- people dropping out, going into other plans -- so it's been very difficult for insurers to predict spending,'' said Prof. Dana Goldman, a health economist at the University of Southern California. ''By contrast, Medicare Advantage is a very predictable business.''

Medicare beneficiaries tend to stay in the same plan from year to year and generally give their plans high marks.

''These are vastly different programs with vastly different populations and vastly different rules,'' said Christine Arnold, a securities analyst at Cowen & Company who follows managed care companies.

Insurers and government officials are still trying to figure out the needs of people insured under the Affordable Care Act. In the course of a year, many people leave the rolls. Some fail to pay their share of premiums. Some qualify for Medicaid. Others get jobs that provide health insurance.

Then there are politics. It took many years for Medicare officials and Congress, working together, to refine the formula for paying private health plans for older Americans. From 2000 to 2003, insurers pulled out of many counties, disrupting coverage for hundreds of thousands of Medicare beneficiaries. Enrollment declined and then grew again after Congress increased payment rates. But bipartisan support for Medicare Advantage increased as insurers enlisted beneficiaries to tell Congress why they liked the program.

By contrast, continuing partisan strife over the health law means that insurers are exposed to political risks. Neither party is willing to reopen negotiations on the law's biggest issues, for fear of the consequences.

Congress did cut back special payments to insurers whose medical costs have exceeded their expectations, and those cuts contributed to the failure of insurance co-ops serving more than half a million people.

''Insurers want to play in this new market, but they are not completely sure what the rules of the game will be,'' said Michael E. Chernew, a professor of health care policy at Harvard Medical School.

UnitedHealth, one of the nation's largest insurers, said last month, ''We are off to our strongest growth start for Medicare Advantage in company history.'' Yet it lost $475 million on Affordable Care Act plans in 2015 and expected to lose a similar amount this year.

The company has said it will consider withdrawing from Affordable Care Act marketplaces in 2017.

Andrew M. Slavitt, the acting administrator of the federal Centers for Medicare and Medicaid Services, described such losses as ''growing pains'' suffered as insurers devised new business strategies and learned what products would appeal to consumers.

But he is also promising help. At a recent investor conference in San Francisco, Mr. Slavitt said he would take steps to prevent people from jumping in and out of the Affordable Care Act marketplace -- buying insurance when they needed costly care and then dropping it.

''Most insurers will stick with it,'' said Thomas A. Scully, who was administrator of the Centers for Medicare and Medicaid Services under President George W. Bush, ''because they cannot afford to abandon this market.''

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URL: http://www.nytimes.com/2016/02/13/us/politics/surge-in-medicare-advantage-sign-ups-confounds-expectations.html

LOAD-DATE: February 13, 2016

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47 of 1000 DOCUMENTS

The New York Times Blogs
(Taking Note)

September 17, 2013 Tuesday

What's More Unpopular Than Health Care Reform?

BYLINE: JULIET LAPIDOS

SECTION: OPINION

LENGTH: 289 words

HIGHLIGHT: Americans don’t want lawmakers to sabotage the Affordable Care Act. 

A new Pew Research Center / USA Today poll indicates that Americans still haven't embraced the Affordable Care Act, President Obama's signature domestic policy measure. Fifty-three percent disapprove of the law, while 42 percent approve. That's a decline in the level of support since last July, when, in the wake of the Supreme Court decision upholding the law, 43 percent disapproved and 47 percent approved. 

The big caveat here is that most Americans still don't understand what the law does. Only 25 percent say they understand the law's impact very well, 39 percent understand it somewhat, and a third have little or no understanding of how the law will affect them.

The other caveat is that, although a majority disapproves of the Affordable Care Act, few Americans support Republican attempts to mess it up.

According to Pew, about half of disapprovers, or 27 percent of the public overall, say elected officials who oppose the law "should do what they can to make the law work as well as possible," while 23 percent of the public holds the nihilistic view that they "should do what they can to make the law fail."

In other words, health care reform isn't popular, but sabotage is less popular. Sabotage isn't even particularly fashionable within the Republican Party. Only 43 percent of Republicans and Republican leaners want lawmakers to strive for failure.

As per usual, however, the outlook's different from the darker corners of the right wing. Sixty-four percent of Tea Party Republicans are in the forced-failure camp.

LOAD-DATE: September 17, 2013

LANGUAGE: ENGLISH

DOCUMENT-TYPE: News

PUBLICATION-TYPE: Web Blog

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48 of 1000 DOCUMENTS

The New York Times

June 10, 2015 Wednesday  
Late Edition - Final

Before Supreme Court Weighs In, Obama Makes His Case for Health Law

BYLINE: By JULIE HIRSCHFELD DAVIS and MICHAEL D. SHEAR

SECTION: Section A; Column 0; National Desk; Pg. 18

LENGTH: 902 words

WASHINGTON -- President Obama on Tuesday condemned opponents of his signature health care law as ''cynical'' partisans seeking to deprive Americans of a benefit that has become an integral part of the country's social safety net, building a tough political case against Republicans as the Supreme Court weighs whether to strike down a key element of the Affordable Care Act.

''This is now part of the fabric of how we care for one another -- this is health care in America,'' the president said in a speech to the Catholic Health Association, an organization that championed the law and has written a brief asking the high court to uphold it. ''It seems so cynical to want to take health care away from millions of people.''  

The court is expected to rule before the end of the month on whether to invalidate subsidies for millions of people who signed up for coverage through HealthCare.gov. If they do, millions of Americans could lose their health insurance, and rates for millions more could rise if the insurance markets collapse in the more than 30 states that use the federal insurance exchange.

The speech was something of a victory lap for a health care measure Mr. Obama argued has defied ''doom and gloom predictions'' and ''Chicken Little warnings'' of economic calamity and freedoms revoked. But it was also a preview of the sharp political rebukes the president is prepared to deal to Republicans should they seek to upend the law in the wake of an adverse ruling later this month.

Whether or not the court invalidates the subsidies, health care is almost certain to be a central issue in the 2016 presidential campaign.

The Affordable Care Act, Mr. Obama said, is no longer just a piece of legislation or an abstract theory, but ''a reality that people on the ground, day to day, are experiencing.''

''Their lives are better,'' Mr. Obama said. ''Americans support this new reality.''

Republicans were quick to counter Mr. Obama's speech even before it began, saying the president was divorced from reality and denying the negative effects of a health care overhaul they said had raised costs and caused some people to lose health coverage they liked.

''I imagine the families threatened with double-digit premium increases would beg to differ, as would the millions of families who received cancellation notices for the plans they had and wanted to keep,'' said Senator Mitch McConnell of Kentucky, the majority leader, calling the Affordable Care Act ''a law that's failed.''

''The sooner President Obama can get to grips with that reality, the sooner we can work together to replace the fear and anguish of Obamacare with the hope and promise of true health reform.''

The Republican Party sought to use the health law as a political weapon against the presumed Democratic presidential front-runner.

''Whether it's skyrocketing costs, canceled insurance plans, or the law's legal issues, the problems caused by Obamacare rest squarely at the feet of this president, Hillary Clinton and the rest of the Democrat party,'' Michael Short, a Republican National Committee spokesman, said in a statement responding to the president's speech.

In his speech Tuesday, Mr. Obama made a familiar case that the 2010 law has brought huge improvements to the lives of millions of people who had previously been unable to afford basic health care, or who could not obtain coverage because of pre-existing conditions.

He cited statistics showing that the law has helped slow the growth of health care costs, and noted that the five years since its enactment has coincided with the longest streak of private-sector job growth on record.

''The critics stubbornly ignore reality,'' Mr. Obama said.

The Supreme Court case centers on a provision in the law that seems to say subsidies are available only to people living where the insurance exchanges had been ''established by the state.''

Speaking on Monday in Germany before returning from a meeting with European leaders, Mr. Obama said he was optimistic that the justices would not invalidate the subsidies with a ''contorted reading'' of the Affordable Care Act and the intent of lawmakers.

''I'm optimistic that the Supreme Court will play it straight when it comes to the interpretation,'' he said. ''If it didn't, Congress could fix this whole thing with a one-sentence provision.''

In fact, Republicans are signaling another drawn-out political fight over fixing the health law if the court rules the subsidies are invalid. Senator John Barrasso of Wyoming, the chairman of the Republican Policy Committee, who called the law an ''expensive disaster,'' said Tuesday that members of his party ''aren't interested in a one-sentence fix -- unless that sentence is: 'Obamacare is repealed.' ''

Mr. Obama's speech was part of a broader effort to shape and define the president's biggest domestic accomplishment in the face of partisan attacks.

The White House also unveiled a new website intended to put the Affordable Care Act into a broader historical context. The site features a timeline suggesting that efforts to expand health coverage began more than 100 years ago.

Critics and doubters of the Affordable Care Act are unlikely to be swayed by the new promotional materials. But White House officials are hoping that Mr. Obama can make a convincing case that the law is working, and that it is here to stay, before he leaves office in 2017.